Verizon Communications Inc. (NYSE:VZ) delivered stronger-than-expected quarterly results and a steady outlook that helped calm industry concerns over subscriber losses and pricing pressure.
New CEO Charts Disciplined Growth Path
With a new CEO outlining a disciplined plan to drive growth through customer retention, cost savings, and divestment of non-core assets, the telecom giant signaled a more confident stance amid an increasingly competitive wireless landscape.
Bank of America Securities analyst Michael J. Funk maintained a Neutral rating on Verizon while reducing his price forecast to $45 from $49, citing execution risks associated with restructuring and renewed marketing efforts under new CEO Dan Schulman.
Related: Verizon Sees Broadband Gains Amid Mixed Financial Results
‘Better Than Feared' Results Ease Industry Fears
Funk said Verizon's third-quarter results were "better than feared" and that management's "balanced tone should ease industry fears."
He noted that new CEO Dan Schulman is prioritizing growth through customer retention, sustainable earnings, and cost efficiencies to fund future initiatives.
On the earnings call, Schulman emphasized a disciplined focus on marketing, operations, and service, pledging major investments in marketing and customer experience to boost mobility and broadband growth.
He said these investments will be funded through aggressive cost reductions, aiming to make the company simpler, leaner, and more agile—a multi-year transformation that will become a continuous part of its operations.
Verizon reported adjusted EPS of $1.21, topping BofA's estimate of $1.18 and the Street's $1.20, supported by adjusted EBITDA of $12.78 billion, slightly ahead of expectations.
Wireless postpaid phone net additions came in at 44,000, exceeding consensus of 28,000, while consumer postpaid phone net losses improved to 7,000 versus BofA and consensus forecasts of 53,000 and 21,000, respectively.
Focus on Pricing Strategy and Non-Core Divestments
Funk said Schulman's focus on using pricing as a competitive tool and divesting non-core assets — likely those unrelated to wireless or fiber — supports a more constructive industry backdrop despite a shrinking net-add pool.
The analyst projects 2025 service revenue growth of 2.3% year-over-year to $83.97 billion and adjusted EBITDA growth of 2.9% to $50.2 billion, with capital expenditures (capex) of $17.3 billion and free cash flow of $20.3 billion at the high end of guidance.
Funk based the $45 price target on a 9.5x forward price-to-free-cash-flow multiple, below Verizon's 10-year average of 11x, to account for execution risk and competitive pressures. He said the company's "sacrosanct dividend" continues to support the Neutral rating.
Price Action: Verizon shares were trading lower by 3.10% at $38.97 at last check Thursday.
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