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Investing.com - Verizon Communications Inc (NYSE:VZ), a telecommunications giant with a market capitalization of $181 billion, maintained its Neutral rating from UBS, which reiterated its $45.00 price target following the company’s latest quarterly results. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
UBS noted that Verizon delivered mixed performance with in-line service revenues and improved profits, though churn rates increased. Service revenues grew 1.6% while EBITDA increased 4.1%, consistent with first-quarter performance. The company maintains strong fundamentals with an EBITDA of $49.89 billion and an attractive dividend yield of 6.38%, marking 20 consecutive years of dividend increases as highlighted by InvestingPro.
Based on the 4% EBITDA growth year-to-date, Verizon management raised the lower end of its guidance, now projecting 2.5-3.5% EBITDA growth for 2025. The company attributed higher customer churn to pricing actions, competitive pressures, and government segment weakness, implementing retention measures in late June.
Verizon increased its 2025 free cash flow guidance by approximately $2 billion due to tax reform benefits. UBS believes the company’s capital allocation strategy will prioritize growth investments and debt reduction going forward.
Management indicated it will provide more details about fiber build plans and capital expenditures in the coming months, with UBS expecting a construction pace of approximately 2 million homes per year once the Frontier deal closes, compared to previous guidance of over 1 million.
In other recent news, Verizon Communications reported better-than-expected earnings for the second quarter of 2025, with an adjusted earnings per share (EPS) of $1.22, surpassing the forecast of $1.19. The company’s revenue also exceeded expectations, reaching $34.5 billion compared to the projected $33.71 billion. Goldman Sachs has reiterated its Buy rating on Verizon, maintaining a price target of $52, following solid headline financial metrics and raised guidance for EBITDA and free cash flow for 2025. Additionally, JPMorgan raised its price target on Verizon to $49 from $47, citing the company’s focus on profitability over subscriber growth. Verizon’s Chief Financial Officer, Tony Skiadas, emphasized the company’s aim to improve volumes year-over-year while maintaining key financial priorities. KeyBanc Capital Markets maintained its Sector Weight rating on Verizon, adjusting its 2025 and 2026 adjusted EBITDA estimates upward despite citing more negatives than positives in the company’s second-quarter results. These developments reflect Verizon’s strategic focus on financial performance amid a competitive landscape.
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