Raymond James reiterates Verizon stock rating on subscriber growth strategy

Raymond James has reaffirmed its Outperform rating and $56.00 price target for Verizon Communications Inc. (NYSE:VZ), noting the stock's current trading price of $47.88 presents roughly 17% upside potential. The investment firm deems Verizon undervalued at present levels and has revised its financial model, redistributing EBITDA between the third and fourth quarters to better reflect anticipated business flow while adhering to fiscal 2026 guidance.

The third quarter is expected to see additional expenses linked to FIFA World Cup tail-end costs and heightened marketing efforts due to football season plan changes. Raymond James also considers spectrum asset purchases as below-the-line items in its assessment. The firm observed Verizon's disciplined approach to the iPhone launch, particularly the introduction of the higher-priced foldable iPhone, with most incremental costs expected to be absorbed by customers rather than via increased subsidies.

Management reaffirmed a five basis point churn reduction target, which Raymond James has consistently modeled, and affirmed that consensus estimates are attainable for EBITDA and earnings per share. The investment firm emphasized Verizon's dividend yield of approximately 5% as part of the total return narrative, with the actual yield standing at 5.88%.

Verizon has a commendable history of raising its dividend for 22 consecutive years. Investors are encouraged to explore 5 additional exclusive tips for Verizon via InvestingPro. Recently, Verizon Communications Inc. reported positive developments, including Scotiabank raising its price target to $52.50 due to revenue growth in mobility and broadband services.

Verizon's postpaid phone net additions increased to 184,000, and management boosted its 2026 guidance for service revenue and free cash flow. T-Mobile US Inc. and Verizon Wireless also settled lawsuits over advertisements related to carrier switching, with both entities dismissing their claims in Manhattan federal court. KeyBanc upgraded T-Mobile's rating to Overweight with a $250 price target, citing improving growth prospects in the wireless sector.

AT&T received a similar upgrade to Overweight with a $36 price target. However, Citi highlighted potential risks to AT&T, Verizon, and T-Mobile stemming from SpaceX's potential network build, which could reshape the competitive landscape, as its Starlink division might compete directly with established carriers.