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Verizon: Positioned to Outperform

  • Oppenheimer & Co. Inc.
  • September 4, 2019

Industry consolidation and 5G networks to improve wireless fundamentals and growth

Oppenheimer analysts believe we are on the verge of two major disruptive events in the wireless industry: the T-Mobile/Sprint merger and the roll-out of next-generation 5G networks. The T-Mobile/Sprint merger will reduce the number of major wireless competitors from four to three, leading to less aggressive marketing promotions. We are also in the midst of next-generation network build-outs which historically have been an opportunity for the leader to gain market share.

verizon and 5g networks

Last week, we upgraded Verizon on attractive valuation, at ~9% free cash flow yield, P/E multiple is at a 10-year low, and improving financials. The company is re-focused around building the best 5G network, which Oppenheimer analysts think is the right strategy. 5G is a catalyst, and it will help Verizon grow its Average Revenue Per User with a greater mix of unlimited plans.

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