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Investing.com -- Verizon Communications was upgraded to “Outperform” by Evercore ISI, which named it its top pick in the wireless sector, citing improving subscriber trends, fiber growth potential, and a compelling valuation following years of relative underperformance.
Verizon (NYSE:VZ) shares are up 11% year-to-date, outpacing the broader S&P 500 but still trailing peers AT&T (NYSE:T) and T-Mobile, which have gained 19% and 16% respectively.
We view VZ’s relative underperformance as too punitive, Evercore wrote, pointing to consistent delivery on broadband targets, momentum in business wireless, and improving trends in postpaid phone subscribers.
The firm raised its price target to $48 from $44, implying a 6.5x EV/EBITDA and 11.7x price-to-free-cash-flow multiple on 2026 estimates.
When adjusted for expected asset-backed securities proceeds, the P/FCF drops to 9.7x—still at a discount to AT&T and T-Mobile.
Evercore sees Verizon benefiting from defensive sector rotation amid macro uncertainty, with wireless stocks offering domestic exposure and limited tariff risk.
It also flagged strategic upside from Verizon’s planned acquisition of Frontier’s fiber assets, set to close in early 2026. That deal could bring Verizon’s fiber footprint to 29 million locations, narrowing the gap with AT&T and supporting convergence opportunities.
We see $400-500 million in topline synergy potential over time, analysts said, as Verizon leverages the Frontier network to cross-sell wireless services and reduce churn.
While the wireless market is showing signs of deceleration, Evercore believes Verizon’s current setup is attractive for value investors.
VZ is Evercore’s top value idea, the note said, upgrading the stock from “In Line” and pointing to excess capital capacity that could support share buybacks of $5 billion annually starting in 2027, or earlier.