Verizon Communications Inc VZ

Verizon Likely Won't Grow Revenue Rapidly but Cash Flow Should Remain Strong

Verizon Communications is primarily focused on the wireless business, where it has taken steps to ensure it remains well positioned, building fiber deeper into major metro areas, acquiring a huge chunk of spectrum, and ramping up spending to put that spectrum to use. We believe Verizon will deliver consistent results, but growth will likely be very modest. Rivals AT&T and T-Mobile offer comparable services and sell at similar prices, which we expect will diminish Verizon’s market share lead over time. We don’t expect liabilities associated with lead-sheathed cabling will overly tax Verizon’s ability to generate steady cash flow, but this matter creates additional uncertainty that is difficult to quantify.