KeyBanc analyst Brandon Nispel had an Overweight rating on Verizon Communications Inc (NYSE:VZ) with a price target of $46.
The analyst hosted a vNDR with Verizon’s CEO of Verizon Consumer Group (VCG), Sowmyanarayan Sampath (Sampath).
Nispel noted that with operational changes implemented in 2023, Verizon will see better performance on the VCG in 2024.
The analyst flagged the interesting commentary mainly centered around myPlan, where Verizon is seeing intake ARPUs increasing double digits Y/Y, myPlan lines will likely double in 2024 from 13 million as of the fourth quarter, and the attach rate on perks is up, which could help improve the margins. He noted that several changes should help enhance KPIs for VCG going forward.
The analyst stated that Verizon is beginning to talk more openly about using data within its business, whereby it tracks over 1,500 data points on every customer.
The data allows VZ to implement personalized offers, break down various cohorts to understand their behaviors and be more surgical with its GTM. Nispel noted that much of this data ultimately leads to better customer outcomes and, more importantly, better outcomes for Verizon.
The recent price increase is resulting in first-quarter softness, though the analyst said churn is on-plan.
The analyst cited more moderate wireless competitive dynamics with Verizon’s share metrics improving, its broadband subscriber growth, accelerating EBITDA growth, and improving cash flow profile from lower capex remaining intact.
The analyst also found the stock attractive, trading below historical averages. He tweaked estimates based on new ARPU assumptions.
Nispel projected first-quarter revenue of $33.375 billion (prior $33.399 billion) versus consensus of $33.407 billion and EPS of $1.08 (prior $1.09).