Verizon ramps up its 5G presence: Could it impact the key stocks and sectors?

The stock market is deeply interconnected. This theory holds as Trading.biz analyst Rahul Nambiampurath shifts focus on Verizon Communications.

Rahul believes the expected impact of the increasing 5G rollout on Verizon could rub off onto other sectors and stocks.

It is worth noting that Verizon (VZ) has been underperforming the S&P space over a longer timeframe, with a dip of 28.44% in 5 years.

Yet, the analyst believes that the aggressive 5G build-out could favour this dividend-paying stock. Other sectors and stocks could also be positively impacted, which include the following:

• Tech infrastructure providers like Ericsson, Cisco, and Nokia
• Semiconductor firms like Intel, Broadcom, and Qualcomm
• Data centre REITs and Cloud Computing services like Microsoft Azure, Amazon AWS, and Digital Reality
• Content providers like Disney and Netflix
• However, the focus still promptly remains on Verizon.

Tracking the Verizon (VZ) fundamentals

Rahul highlights the importance of a dividend-paying stock in 2024 when the economic factors aren’t stable. VZ’s quarterly dividend history is one reason why it looks desirable in 2024.

With the financial performance report expected to be released today, analysts are expecting a decrease in earnings for Q1 2024. Rahul also puts the earnings-per-share expectation at $1.15, 5% lower than Q4 2023. However, the market expects revenue to increase by 1%. The analyst believes the toned-down financial expectations might favour VZ, as these numbers would be easier to outperform.

Other factors that make VZ an optimistic bet in the mid-to-long term are expectations surrounding stock buybacks by 2026, better debt restructuring throughout the year, and strategic market positioning.

Technical analysis of Verizon (VZ)

Verizon (VZ) daily chart: TradingView

The daily chart of VZ hints at a nearly complete Cup-and-Handle pattern. A surge past the 50-day EMA (orange) line can take VZ to new highs. As identified by Rahul’s analysis, the immediate target is $42.47, above which VZ might have the legs to go higher.

Brandon Nispel, analyst at KeyBank, has a “buy” rating for VZ, with a price target of $46.