MS resumes Verizon at Equal-Weight, sees limited upside without wireless gains

Investing.com -- Morgan Stanley resumed coverage of Verizon (NYSE: VZ) with an Equal-Weight rating and a $47 price target, saying the telecom giant’s low valuation and expected free cash flow boost from tax changes are offset by tepid EBITDA growth and lingering questions around consumer wireless momentum.

The brokerage views Verizon’s stock as fairly valued, with its target implying about 9% upside.

The forecast reflects 2–3% annual adjusted EBITDA growth through 2028 and incorporates the impact of recent U.S. tax legislation that restores bonus depreciation, which could lift free cash flow by more than $1.5 billion per year through 2027.

That increase could give Verizon flexibility to resume buybacks or accelerate fiber expansion, Morgan Stanley said.

But any meaningful re-rating will hinge on improved performance in its consumer wireless unit, the key driver of sentiment around the stock.

The firm’s bull case sees shares rising to $54 if Verizon can lift wireless subscriber growth and EBITDA to above 3% annually.

But a bear case scenario, with industry competition intensifying and subscriber gains slowing, could push the stock down to $35.

While Verizon trades at a discount to peers, Morgan Stanley said that’s appropriate given its moderate growth profile.

The firm noted its updated estimates reflect tax-driven FCF upside, while many peers’ figures do not yet fully account for the recent law change.

The note also referenced Verizon’s pending acquisition of Frontier’s fiber assets, with a $38.50 price target on Frontier shares based on the agreed deal value.

The transaction is expected to close in the first half of 2026.

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