Verizon Communications (VZ, Financials) shares fell 3.02% to $42.12 as of 12:31 p.m. ET on Tuesday, extending losses for a second consecutive day following warnings of weaker consumer demand and heightened competition in the telecommunications sector.
Speaking at a Deutsche Bank conference, Verizon's Chief Revenue Officer Frank Boulben emphasized increased customer turnover and difficult year-over-year comparisons approaching early 2025. The comments sparked investor questions about the company's expansion path.
Citing lower confidence in the stock's capacity to outperform the market, Wolfe Research dropped Verizon from "outperform" to "peer perform." Analyst Peter Supino highlighted growing expenses of keeping Verizon's premium customer base, especially in an environment with less network quality difference.
Higher phone subsidies and upgrade charges are among the growing expenditures the firm bears connected to client acquisition. Although Verizon has spent around $50 billion on 5G infrastructure, critics claim that the expenditure has yielded very little competitive benefits.
Further restricting Verizon's free cash flow and hence reducing money available for shareholder distributions is its upcoming purchase of Frontier Communications (FYBR, Financials).
Separately, U.S. Transportation Secretary Sean Duffy chastised Verizon for delays in fulfilling a $2.4 billion deal with the Federal Aviation Authority. Timing and execution problems have drawn attention to the deal meant to improve the FAA's communications system.
Wolfe Research did not set a fresh price objective for Verizon shares in face of these difficulties.
