Citi analyst Michael Rollins said in a note to clients Tuesday that the firm expects a “lighter 2Q22 performance for Verizon (NYSE:VZ) with respect to postpaid phone net adds and EBITDA.”
However, the Citi analyst, who has a Neutral rating and $54 price target on the stock, believes the “two tranches of net price increases should push Verizon’s financial performance back towards the middle of its guidance range for EBITDA and EPS,” funding an “uptick in promotional activity to spur better volume and to absorb some inflationary cost pressures.”
“We have lowered our postpaid phone net adds for 2Q22 to +25k from our prior estimate of +160k, including –125k for consumer. We have also moderated 2Q22 EBITDA and EPS as promotional spending may not have receded from 1Q levels as previously indicated by management,” wrote Rollins.
“While FY22 consensus financial estimates should rise for Verizon heading into the earnings, the absence of forward progress on headline postpaid phone adds and financial performance in 2Q22 may limit near-term upside potential.”
Verizon will release earnings for its latest quarter on July 22. The company’s shares have performed better than most in 2022, down 3%.