Shares of Verizon Communications (VZ 0.37%) were among the winners last month. The telecommunications giant delivered a solid fourth-quarter earnings report and continued to bounce off its lows from last year as it rolled out new C-band spectrum and reported solid postpaid net phone adds.
According to data from S&P Global Market Intelligence, the stock finished the month up 12%.
As you can see from the chart below, Verizon shares outperformed the S&P 500 throughout the month and then jumped after the company's earnings report came out toward the end of January.
Verizon is on the mend
Prior to the earnings report, Verizon gained on several bullish analyst notes as Wall Street applauded the ongoing turnaround in the business.
On Jan. 3, KeyBanc upgraded the stock from sector weight to overweight as it forecast less competitive intensity in the industry and noted its broadband subscriber growth is well ahead of rival AT&T.
Wolfe Research also raised its rating on the stock to outperform, noting the company's falling capital expenditures and improving debt leverage.
Those upgrades helped push the stock to five straight winning sessions to start January even as the S&P 500 fell during that span.
On Jan. 16, Citigroup opened a "positive catalyst watch" on the stock ahead of its earnings report as it anticipated a stabilizing wireless competitive environment, which drove the stock up 2%. The following day, the stock pulled back 1% as it announced a $5.8 billion impairment charge related to weakness in the Verizon Business Group unit.
Finally, the stock jumped 6.7% on Jan. 23 as it delivered a solid earnings report. Revenue fell 0.3% to $35.1 billion, which beat estimates of $34.6 billion, while adjusted earnings per share fell from $1.19 to $1.08, which matched the consensus.
While those results might seem discouraging, Verizon reported growth in a number of key areas, including 449,000 postpaid phone net adds and 413,000 broadband net additions.
Wireless service revenue was up 3.2% to $19.4 billion, showing the core mobile business continues to grow.
NYSE: VZ
Key Data Points
What's next for Verizon
For 2024, the company forecast 2% to 3.5% wireless service revenue growth, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of 1% to 3%.
On the bottom line, it expects adjusted earnings per share of $4.50 to $4.70, which was below the $4.71 it reported in 2023.
Despite the decline in earnings, the company is still on the right track with phone and broadband additions, and it's managing its debt burden. The stock is also cheap at a price-to-earnings ratio of 9, helping to give it a post-earnings boost.
