VZ - Embedded Expectations Analysis - 2018 08 21
Verizon Communications Inc. (VZ:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings with a 16.8x Uniform P/E, implying muted expectations for the firm, while management is concerned about their ability to transition to a 5G data network and implement Verizon Fiber without significantly increasing their spendingSpecifically, management may lack confidence in their ability to achieve $10bn of cumulative cash savings over the next four years. Furthermore, they appear to lack confidence in their ability to move to a 5G network without significantly increasing their total spend, in terms of exaggerating confidence in their ability to implement 5G while keeping capex spend consistent as they did transitioning to 4G. Also, they may be concerned that their transition to Verizon Fiber will increase capex in their wireline segment
Verizon Communications is a holding company. Through its subsidiaries, the company provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. The company has two reportable segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The company's Consumer segment provides consumer-focused wireless and wireline communications services and products under the Verizon brand and through wholesale and other arrangements. The company's Business segment provides, among others, wireless and wireline communications services and products, video and data services, corporate networking solutions, security and managed network services.
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