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​​Verizon (VZ) stock forecast: preparing for an ultra-good 2022?

By Prachi Sinha

Edited by Vanessa Kintu


Updated

Exterior of a Verizon Communications store
Verizon Communications is a pioneer and global leader in the technology and communications business – Photo: Shutterstock

A pioneer and global leader in the technology and communications business, Verizon Communications (VZ) was founded in 2000. Incorporated in Delaware, its headquarters are in New York City.

According to data of 20 October 2021, the company has over 1,500 retail locations in more than 150 countries. It’s ranked at number 20 on the Fortune 500 list. With $10.2bn paid in dividends in 2020, Verizon is one of the highest yielding stocks on the Dow Jones Industrial Average stock market index.

As of 2017, Verizon Communications stock was the only publicly traded telecommunications company with two listings in its home country, appearing on both the New York Stock Exchange (NYSE) and NASDAQ.

Verizon offers telecommunication services by way of voice, data and video solutions through its state-of-the-art platform and networks. It plays strongly on meeting customers’ growing demand for mobility and reliable network connectivity. In its operating structure, it targets two primary areas of Retail Consumers and Business

In a 4 January 2022 press release, the company announced going ‘ultra’ through its 5G Ultra-Wideband Network, set to launch on 19 January 2022. With its 5G Home Internet and 5G Business Internet, Verizon expects to provide more than 100 million people access to connectivity speeds 10 times faster than 4G​​.

Hans Vestberg, the company’s chairman and CEO, ushered in the news, saying:

“This massive launch will put incredible speeds, reliability and security in the hands of our customers and amplifies our offering of reliable home and business broadband options to more places around the country, well ahead of the commitment we made last year.”

Keeping its recent 5G Ultra launch in mind, what does the Verizon stock projection seem like? Join us as we dig deeper into its financials and latest news, and outline a plausible Verizon share price forecast.

Q4 2021 results and fundamental analysis

On 25 January 2022, the company released its Q4 2021 financial results, reporting strong revenue growth on an annual basis. Overall operating revenue stood at $133.6bn for the year 2021, 4.2% higher than the $128.2bn in 2020. However, the Q4 2021 revenue of $34.1bn was around 1.7% lower than Q4 2020 revenues of $34.7bn.

The majority portion of Verizon’s operating revenue comes from service, which showed an overall annual increase of 0.5%, up from 2020’s $109.8bn to 2021’s $110.4bn. Its other reportable segment of wireless equipment reported growth of 25.54%, up from 2020’s $18.4bn to 2021’s $23.1bn.

Earnings per share (EPS) for full-year 2021 were reported at $5.32. Compared to an EPS of $4.30 in 2020, there’s been an increase of 23.72%. Reported EPS for the final quarter of 2021 remained unchanged from Q4 2020 at $1.11.

Net income for 2021 was $22.6bn. Compared to net income of $18.3bn for 2020, that’s an increase of 23.5%.  

On its reportable consumer segment, revenues increased by 7.68%, rising from $88.5bn in 2020 to $95.3bn in 2021. In Q4 2021 alone, revenue was reported to be $25.6bn – 7.11% higher than Q4 2020’s revenue of $23.9bn. These strong growth numbers suggest high demand for Verizon’s higher-tier premium mobility and broadband offerings.

Vestberg lauded the 2021 financial results:

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“2021 was a transformational year for Verizon that will serve as a catalyst for us. We delivered on all of our goals in 2021 and made great progress on our five paths of growth, finishing the year with strong operating and financial momentum. As we move into 2022, we have the necessary assets to realize our strategy that we laid out in 2019. We are laser focused on executing our 5G strategy and providing value to our customers, shareholders, employees, and society, as 2022 will be the most exciting year yet for Verizon.”

5G launch and recent stock price movements

Verizon has had a tricky two years since Covid-19 struck. While there have been recorded highs of $61.74, as on 3 December 2020, the stock has fallen by 17.08% to its last close price of $51.19, as of 28 January 2022.

The company started the year at a close price of $58.85. The price has fallen by 13.01%. Just days before its 5G Ultra launch, on 2 December 2021, the stock had hit lows of $49.78, which is only 1.2% higher than the low of $49.18 on 24 March 2020 during the pandemic.

The latest in Verizon stock news has been a rollout of its 5G network. Following the announcement of Verizon’s 5G Ultra-wideband happened in early January 2022, VZ stock trading volume increased by 45%. From 18.2 million in volume on 3 January 2022 to 26.4 million a day later, the news was well-received in the stock market. Promising the power and high-speed performance of broadband internet in mobile phones, 5G Ultra-Wideband is expected to be a game-changer.

In its 20 January 2021 press release, the company was the most-awarded carrier with respect to network quality by J.D Power, an American data analytics company. Over the course of the last 18 years, Verizon has won over 175 J.D Power awards. It was found to have the least call, messaging and data problems across the US.

Kyle Malady, Verizon’s chief technology officer said:

“The J.D Power awards are recognised as the voice of the consumer and Verizon’s history of success is a testament to our commitment in delivering the best network experience for our customers. That commitment continues as we bring our 5G Ultra-Wideband to more than 100 million Americans this month.”

Verizon stock forecast

According to the algorithmic forecasting of Wallet Investor, as of 28 January 2022, the Verizon stock market price could fall to $48.056 by January 2027, 5 years from now. The site says Verizon stock value could reach $49.413 by December 2025.

Eight Wall Street analysts’ predictions compiled by TipRanks suggest a consensus VZ stock price target for the 12-month share price of $60.75. The Verizon stock chart projection varied from the low of $56 to the high of $68. The average price target represents an 18.67% upside change from the last trading price of $51.19, as of 28 January 2022. Of the eight analysts, four rated the stock a ‘buy’ and four maintained a ‘hold’ rating, based on their Verizon stock analysis.

On 21 January 2022, Tigress Financial lifted its Verizon future stock price target to $68 from $67 and gave the company a ‘buy’ rating. On 11 January 2022, Goldman Sachs downgraded its rating from ‘conviction-buy’ to ‘buy’. Lastly, Wells Fargo cut its price target from $58 to $56 and gver it an ‘equal-weight’ rating on 21 October 2021.

When looking for a VZ stock forecast, it’s important to bear in mind that analysts’ forecasts and price targets can be wrong. Analysts’ Verizon stock predictions are based on making fundamental and technical studies of the stock’s performance. Past performance is no guarantee of future results.

FAQs

Is Verizon stock a buy?

According to Tip Ranks, four analysts have given Verizon stock a ‘buy’ recommendation and four have rated it a ‘hold’. The company has shown revenue growth of 4% in 2021. But last year, its stock price declined by approximately 12% from $58.85 to $51.96.

Note that analyst predictions are often wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose.

Will the Verizon stock go up or down?

According to algorithmic-based application Wallet Investor, the price could go down to $48.056 as of December 2027.

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