Verizon Communications (VZ), a prominent member of the Dow Jones Industrial Average, is poised to unveil its financial performance for the third quarter on Tuesday. As the telecom giant prepares to release its earnings report, analysts and investors alike are eagerly anticipating insights into key areas like bundling strategies, spectrum investments, and recent downsizing efforts.
Earnings Estimates and Key Items to Watch:
Analysts project that Verizon will report third-quarter revenue of $33.43 billion, marking an increase from the $33.34 billion generated during the same period last year, according to data from Benzinga Pro. While the company has missed revenue expectations in two consecutive quarters and four out of the last six, it boasts a strong track record overall, having exceeded estimates six times in the past ten quarters.
In terms of earnings per share, analysts anticipate Verizon to report $1.18, down from the $1.22 achieved in the third quarter of 2023. Despite this expected dip, the company has consistently met or exceeded earnings per share expectations for eight straight quarters and nine out of the last ten.
One area that will be closely watched is the performance of Verizon’s bundled plans, which offer customers free streaming platform subscriptions. The company has seen success in recent quarters with net additions, fueled by these enticing bundles. Investors will be eager to see how these bundling strategies have translated into subscriber growth and usage patterns, especially as other telecom giants like AT&T and T-Mobile are also reporting their quarterly results this week.
The earnings report will also shed light on Verizon’s recent investments in spectrum licenses and its downsizing efforts, which have included job cuts.
Impact on Dow Jones and Market Volatility:
As one of the leading constituents of the Dow Jones Industrial Average, Verizon’s earnings report holds significant weight for the broader market. ETFs that track the Dow Jones, such as the SPDR Dow Jones Industrial Average ETF (DIA), could experience heightened volatility based on the performance of Verizon and other Dow component companies reporting this week.
Analyst Sentiment and Price Action:
Analysts are generally bullish on Verizon, with several raising their price targets in recent months. Scotiabank maintained a Sector Perform rating and increased its price target from $46.25 to $47.25. Tigress Financial kept its Buy rating and raised its price target from $52 to $55. Bank of America maintained a Neutral rating but elevated its price target from $41 to $45. Citigroup retained a Buy rating and raised its price target from $47 to $49. Raymond James kept its Outperform rating and boosted its price target from $44 to $48.
Verizon stock has experienced a slight decline of 0.6% to $43.68 on Monday. This comes against a 52-week trading range of $31.26 to $45.36. Notably, Verizon shares have surged 12.5% year-to-date in 2024.
With its upcoming earnings report, Verizon is positioned to provide valuable insights into the telecom landscape, particularly as it navigates a competitive market and seeks to maintain its position as a leader in the industry. The report is anticipated to generate significant interest and could impact both the company’s stock price and the broader market.