5G - New growth driver for Verizon Recently introduced ope | 🚀 Robin Rocket

5G - New growth driver for Verizon

Recently introduced operator Verizon spoke at the Goldman Sachs conference, where they shared their plans for the further development of the company.

Verizon $VZ is the largest US cellular operator in terms of subscribers.
Target price from JPMorgan $65, +20% upside.

Theses for growth:

• Development of tariffs for 5G.
Verizon only provides 5G access to users with unlimited or premium plans, which cost an order of magnitude more than standard plans.

With the rise of 5G, demand for more expensive tariffs is expected to rise, which will have a positive impact on the company's revenue.

• Collaboration with streaming platforms. Verizon has a multi-million dollar customer base, which makes it an attractive partner to collaborate with. When connecting premium and unlimited packages, free subscriptions for a period of 6 to 12 months to streaming services Disney+, Discovery+, as well as to the music service Apple Music.

The details of the agreements were not disclosed, but comments from company representatives indicate that Verizon makes a profit from every customer it attracts. This package, combined with 5G exclusivity, is expected to be the main drivers of the company's revenue growth.

• Strategy for the future.
When allocating capital, the company pays most attention to its own development. $VZ pays dividends and focuses on reducing debt burden. After 4-5 years, Verizon will start the share buyback program again.

• Dividend yield.
In addition to the above, the company has an attractive dividend yield: 4.71%

Fundamental indicators:

• Market cap = $225 billion
• fwd P / E = 10x
• front P / E sector = 24x
• Fwd PEG = 3.5x

Not an investment recommendation.