The Market Continues to Overreact to the New Normal for Verizon; Shares Undervalued

We continue to believe the market is overly focused on Verizon’s struggle to add postpaid consumer wireless customers in recent quarters. The firm is the share leader in this category, which creates a headwind in an environment where the carriers’ networks look increasingly alike and rivals are marketing with a similar level of aggression. This dynamic is especially challenging following a price increase, as Verizon instituted earlier this year, but taking up pricing is important for the long-term health of the firm and the industry. We are maintaining our $59 fair value estimate and now believe the shares are highly attractive.