Verizon’s stock rallies after J.P. Morgan upgrades, citing stabilizing revenue and high dividend yield
Shares of Verizon Communications Inc. rose 1.4% in premarket trade Friday, after the telecom and media company was upgraded J.P. Morgan, citing the 5G opportunity, relative valuation and the high dividend yield. Analyst Philip Cusick raised his rating to overweight, after being at neutral for at least the last three years. Cusick said after a meeting with Chief Executive Lowell McAdam, he has a better understanding that Verizon’s approach to wireless has the company on an “increasingly stable footing,” and the 5G opportunity “will start to crystallize in the next few months.” Cusick said the meeting also left him less worried about the potential distraction of a big media, cable or spectrum deal. He said he’s become bullish because the stock is down 10.8% year to date while the Dow Jones Industrial Average up 0.1%, despite an increased level of confidence that revenue can stabilize. And Verizon has a 5.00% dividend yield as of Thursday’s close, which is more than double the implied S&P 500 yield of 1.93% and the implied Dow yield of 2.14%, according to FactSet.