2024-07-23 10:47:28 ET
Summary
- Verizon's Q2 revenue miss has wiped out its ~8% YTD gains all at once, taking the stock's choppy performance this year back to square one.
- Yet the company has continued to deliver favourable progress on its three pillars - namely, wireless service revenue growth, adjusted EBITDA expansion, and FCF growth.
- Postpaid wireless net adds have also returned to the positive side, with increasing adoption of its premium myPlan and myHome offerings coupled with comparatively limited churn.
- Taken together, we view the stock's latest pullback as the final boarding call for close-to-7% dividend yield, as Verizon's fundamentals are poised for better days in 2H24 alongside greater valuation correlation to rising Treasuries amid impending rate cuts.
Verizon Communications Inc.'s ( VZ ) year-to-date gains have been wiped out after its second quarter earnings were disappointing, highlighting the stock's choppy run this year. The stock's elevated volatility continues to reflect its strong correlation to long-end Treasury performance, as we had previously discussed , which has fluctuated due to rising rate cut expectations later this year. And Verizon's underwhelming report this week has only exacerbated the fundamental-driven component of the stock's valuation prospect....
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For further details see:
Is Verizon Still A Buy After The Q2 Earnings Selloff?