New York-based Verizon Communications Inc. (VZ) provisions communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. With a market cap of $190.3 billion, Verizon operates through Verizon Consumer Group and Verizon Business Group segments. The telecom giant is expected to release its Q3 earnings before the market opens on Tuesday, Oct. 22.
Ahead of the event, analysts expect Verizon to report a profit of $1.17 per share, down 4.1% from $1.22 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in each of the past four quarters. Its EPS for the last reported quarter declined 5% year-over-year to $1.15 but managed to exceed the consensus estimates by a small margin.
Looking ahead to fiscal 2024, analysts expect Verizon to report an EPS of $4.58, down 2.8% from $4.71 in fiscal 2023. In fiscal 2025, its EPS is expected to grow 2.6% year-over-year to $4.70.
VZ has gained 19.5% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 19.7% gains and the Communication Services Select Sector SPDR ETF Fund’s (XLC) 24.1% returns during the same time frame.
Shares of Verizon plunged 6.1% after its Q2 earnings release on Jul. 22. Although the company’s bottom line surpassed Wall Street’s estimates by a slight margin, its total operating revenue of $32.8 billion fell short of expectations. Verizon’s consumer segment saw a 1.5% year-over-year growth in revenues to $24.9 billion, but its business segment’s revenue dropped 2.5% to $7.3 billion.
It showcased strong broadband growth with a net addition of 391,000 subscribers, but its prepaid wireless subscribers dropped by 624,000 during the quarter. Verizon’s net income declined by 1.3% to $4.7 billion due to a 28 basis points net margin contraction.
The consensus opinion on VZ stock is moderately bullish, with a “Moderate Buy” rating. Out of the 23 analysts covering the stock, eight recommend a “Strong Buy,” two suggest a “Moderate Buy,” 12 advise a “Hold,” and one has a “Strong Sell” rating.
The mean price target of $46.12 suggests a potential upside of 2.4% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
