Analysts Are Updating Their Verizon Communications Inc. (NYSE:VZ) Estimates After Its Second-Quarter Results

Shareholders might have noticed that Verizon Communications Inc. (NYSE:VZ) filed its second-quarter result this time last week. The early response was not positive, with shares down 6.2% to US$38.89 in the past week. Revenues of US$33b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.09, missing estimates by 3.0%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Verizon Communications

Following last week's earnings report, Verizon Communications' 23 analysts are forecasting 2024 revenues to be US$135.2b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 67% to US$4.45. In the lead-up to this report, the analysts had been modelling revenues of US$135.3b and earnings per share (EPS) of US$4.48 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$46.32, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Verizon Communications, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$38.76 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Verizon Communications' growth to accelerate, with the forecast 1.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.4% per year. So it's clear that despite the acceleration in growth, Verizon Communications is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Verizon Communications' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$46.32, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Verizon Communications going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 4 warning signs for Verizon Communications that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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