- Major Downgrade: BNP Paribas has cut its price target for Verizon (VZ) stock to $44 per share and downgraded its rating from Outperform to Neutral.
- Leadership Uncertainty: The downgrade stems from concerns over the telecom giant’s strategy following the recent appointment of former PayPal CEO Dan Schulman to the top job.
- Competitive Pressure: Analyst Sam McHugh expressed doubts about Verizon’s willingness to defend its market share against aggressive rivals like T-Mobile, Comcast, and Charter.
- Muted Investor Reaction: A recent satellite network deal with AST SpaceMobile failed to boost investor confidence in Verizon, even as it sent ASTS stock soaring.
Verizon Stock Hit with Downgrade Amid Strategy Fears
Verizon Communications (VZ) is facing renewed investor scrutiny after a prominent analyst at BNP Paribas slashed the company’s stock price target, citing significant uncertainty following a major leadership change. The move signals growing concern on Wall Street about the telecom giant’s direction under its new chief executive.
CEO Shakeup Raises Red Flags
On Tuesday, BNP Paribas analyst Sam McHugh lowered his price target for Verizon to $44 per share, downgrading the stock to Neutral from a previous Outperform rating. While the new target still implies an 8% upside, the downgrade reflects a less optimistic outlook on the company’s future.
The core of the issue, according to McHugh, is the recent appointment of Dan Schulman, former CEO of PayPal, to replace Hans Vestberg. The analyst argued that this leadership change “raises questions about the company’s strategy” and creates doubt about “how far Verizon is willing to go to defend its market share.”
A Challenging Environment
Verizon has been struggling with net losses from its postpaid phone subscriber base, facing intense competitive pressure from rivals like T-Mobile, Comcast, and Charter. This sentiment was echoed by Wells Fargo, which recently noted that the “short-term setup for Verizon remains challenging.”
Not all analysts share this bearish view. Earlier in the month, TD Cowen analyst Gregory Williams raised his price target to $56, viewing the leadership shift as a positive catalyst. However, the downgrade from a major institution like BNP Paribas has amplified existing worries among investors.
Satellite Deal Fails to Move the Needle
The analyst downgrade comes even as Verizon announced a significant partnership with satellite operator AST SpaceMobile to expand its network coverage in remote U.S. locations. While the deal caused AST SpaceMobile’s stock (ASTS) to surge over 281% year-to-date, Verizon’s shares have seen a comparatively meager 9% increase over the same period, suggesting the move did little to assuage deeper concerns about its core business.
What Wall Street Thinks Now
Despite the recent downgrade, the overall consensus on Wall Street for Verizon stock remains a “Moderate Buy,” based on eight Buys and ten Holds from analysts over the past three months. The average price target of $48.03 suggests a potential 19% upside from current levels. However, the conflicting opinions and strategic questions raised by the CEO change indicate that investors may be in for a turbulent period as the company charts its new course.
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