Verizon Communications Inc. (NYSE: VZ) stock appears set for big things in 2018, as Wells Fargo upgraded the stock from “market perform” to “outperform” and raised its price target from $48 to $50.
The U.S. economy has been booming in 2017, but wireless giants Verizon and AT&T (T) have struggled to grow in an increasingly saturated market. On top of slowing wireless service growth, Verizon has been investing heavily in its next-generation 5G network. Verizon stock is down 14 percent year-to-date, while AT&T shares are down 18 percent.
However, analyst Jennifer Fritzsche says Verizon’s struggles to grow wireless revenue are now fully reflected in the stock’s share price, and things are looking up for Verizon stockheaded into 2018.
“We expect to hear more sooner versus later of the company’s fiber initiative and the math behind it,” Fritzsche writes in a note to investors, according to FierceWireless. “We believe the plan will lay out a convincing case for both revenue growth and cost containment.”
Verizon spent a combined $4.9 billion on buyouts of Straight Path and XO Communications earlier this year to beef up fiber assets ahead of the rollout of 5G. Verizon has been testing its network in select cities throughout the year. In the company’s third-quarter earnings call, CFO Matthew Ellis says 5G trials are going “very well” and that the company still plans on launching its fixed 5G broadband network in 2018.
In addition to the 5G rollout, Verizon may look to continue growing via acquisitions as well. Verizon is one of several companies reportedly negotiating with Twenty-First Century Fox (FOXA) to acquire Fox’s international assets, movie studio and cable and regional sports networks.
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