Keybanc Capital Markets analyst Brandon Nispel downgraded Verizon Communications (VZ) stock from Overweight to Sector Weight, citing concerns about limited EBITDA growth potential and the company’s acquisition of Frontier Communications. Nispel expects a decline in free cash flow and higher costs for growth, leading to a reduced outlook for the stock.
Verizon Communications has acquired Frontier Communications in a $20 billion all-cash deal, boosting its fiber network and broadband services nationwide. The acquisition, expected to close in 18 months, will integrate Frontier’s 2.2 million fiber subscribers and 7.2 million fiber locations with Verizon’s existing infrastructure, creating a significant expansion of Verizon’s fiber footprint and bolstering its delivery of premium services.
