Evercore ISI lifts Verizon stock rating, raises target to $48

On Friday, Evercore ISI analyst Vijay Jayant upgraded Verizon Communications (NYSE:VZ) stock rating from In Line to Outperform, while also increasing the price target to $48 from $44. This adjustment comes as Verizon's shares have demonstrated a strong performance relative to the broader market this year, with an 11% gain compared to the S&P 500's 10% decline, including dividends.

The analyst pointed out that despite Verizon's positive performance, it has lagged behind its competitors, AT&T (NYSE:T) and T-Mobile, which have seen year-to-date absolute returns of 19% and 16%, respectively. AT&T has been buoyed by a successful turnaround narrative and consistent execution, while T-Mobile has enjoyed a robust growth outlook. Verizon, on the other hand, has maintained a defensive strategy due to its leading position in postpaid phone subscribers and premium pricing in a competitive market.

Verizon's management has been recognized for its effective execution in improving postpaid subscriber trends in the Consumer segment, gaining momentum in Business wireless customers, and consistently meeting broadband subscriber targets. The analyst believes that the market has been overly punitive in its valuation of Verizon, not fully appreciating the company's resilient wireless service revenue growth outlook, fiber expansion efforts, and the potential strategic and financial benefits from the upcoming Frontier acquisition.

The report also acknowledges the broader pressures faced by the telecom industry, including signs of a slowdown in wireless industry growth and increased competition. However, the analyst suggests that wireless companies are likely to continue performing well given the current market uncertainty and downside risks.

In conclusion, Evercore ISI has positioned Verizon as its top pick in the wireless sector and its leading Value idea, with the upgraded price target reflecting a 6.5x EV/EBITDA and 11.7x P/FCF valuation on the firm's 2026 estimates. This compares to AT&T's and T-Mobile's valuations of 6.6x/10.8x and 9.4x/15.5x, respectively.

In other recent news, T-Mobile US (NASDAQ:TMUS), Inc. has been involved in several key developments. The company recently approved performance-based stock awards for five top executives, aligning their compensation with T-Mobile's financial performance through 2028. These awards are contingent on the company's core adjusted EBITDA for 2027. In collaboration with Nokia (HE:NOKIA), T-Mobile is testing Nokia's 6G technology in Bellevue, Washington, following FCC (BME:FCC) approval. This collaboration highlights Nokia's potential role in advancing 6G technology, amid industry efforts to develop next-generation wireless networks.

Additionally, Raymond (NSE:RYMD) James has maintained a "Market Perform" rating on T-Mobile stock, adjusting its Q1 2025 C-EBITDA estimate due to anticipated higher equipment subsidies. Despite this, the full-year estimate saw only a slight decrease. Benchmark analysts, meanwhile, have upheld their Buy rating and $275 target for T-Mobile, citing confidence in the company's growth prospects and market strategy. T-Mobile's expansion into smaller markets and government accounts, along with its focus on prepaid brands and home internet, are seen as key growth drivers.

The company is also finalizing the sale of 13.5 MHz of 800 MHz spectrum to Grain Management, enhancing its network compatibility. These recent developments reflect T-Mobile's strategic moves to strengthen its market position and align executive incentives with shareholder interests.

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