A Look At Verizon (VZ) Valuation As New CEO And Dividend Uncertainty Refocus Investor Attention

Verizon Communications (VZ) is under fresh scrutiny as a new CEO takes over just as its high dividend, recently around 6.8%, faces questions and prompts investors to reassess what they want from the stock.

See our latest analysis for Verizon Communications.

Verizon’s share price, now at US$40.23, has slipped over the past month with a 30 day share price return of 3.5% decline and a year to date share price return of 0.7% decline, while its 1 year total shareholder return of 10.5% points to income and dividend reinvestment doing more of the heavy lifting than recent price momentum as investors weigh the new CEO, potential dividend reset and high profile marketing pushes around events like the Super Bowl and FIFA World Cup.

If shifting sentiment around Verizon has you reassessing your watchlist, it could be a useful moment to compare it with other income names in pharma stocks with solid dividends.

With a value score of 4, an indicated intrinsic discount and a share price of US$40.23 sitting below some analyst targets, the key question is whether Verizon is genuinely cheap today or if the market already reflects its future growth potential.

Most Popular Narrative: 15.3% Undervalued

With Verizon Communications’ fair value in the most followed narrative sitting around US$47.48 versus the recent US$40.23 share price, the gap turns on how durable future earnings and margins prove to be.

Ongoing cost optimization, driven by successful voluntary separation programs, copper network decommissioning, AI-powered process efficiencies, and operational streamlining, continues to improve operating leverage and expand EBITDA and free cash flow, underpinning sustainable future earnings growth.

Read the complete narrative.

Curious what earnings power this story is building toward? The narrative leans on steady top line progress, firmer margins and a future valuation multiple that does not assume blue sky outcomes. Want to see how those pieces fit together into that fair value?

Result: Fair Value of $47.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks around intense wireless competition, high capital spending and Verizon’s US$116b net unsecured debt pile could pressure margins and challenge this underpriced narrative.

Find out about the key risks to this Verizon Communications narrative.

Build Your Own Verizon Communications Narrative

If this perspective does not fully align with your own view, you can evaluate each assumption yourself and build a custom Verizon thesis in just a few minutes, starting with Do it your way.

A great starting point for your Verizon Communications research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Verizon is on your radar, do not stop there. Widen your opportunity set with a few focused screens that can surface other income and growth candidates quickly.

• Target reliable income by checking out these 14 dividend stocks with yields > 3%, where you can focus on companies offering yields above 3%.
• Position yourself early in emerging tech trends with these 25 AI penny stocks and see which smaller names are tied to artificial intelligence themes.
• Hunt for potential mispriced opportunities through these 877 undervalued stocks based on cash flows, which filters for stocks trading below estimated cash flow based value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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