Will Verizon Follow the Same Earnings Path as AT&T

By Chris Lange Updated Jan 13, 5:18AM EST · Published Jul 25, 4:12PM EDT

Will Verizon Follow the Same Earnings Path as AT&T — © Thinkstock

Verizon Communications Inc. (NYSE: VZ) is scheduled to release its most recent earnings report before markets open on Tuesday. Ahead of this earnings report, this telecom giant announced that it will acquire Yahoo! Inc. (NASDAQ: YHOO) for a total of $4.83 billion. More details are still surfacing about the deal and what will happen. But the question pertaining to earnings is how Verizon will match up against its rival AT&T, Inc. (NYSE: T).

AT&T and Verizon are not flash companies in the world of high tech, but they have been perfect investments as the market has rallied.

As for AT&T earnings, the company posted $0.72 in earnings per share (EPS) on $40.52 billion in revenue in the second quarter. Consensus estimates from Thomson Reuters called for $0.72 in EPS on $40.62 billion in revenue. Free cash flow rose to $4.8 billion, and the company said it expects to meet or exceed full-year guidance.

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Accordingly analysts were fairly positive on AT&T after the earnings report. Can Verizon match this performance? Verizon’s consensus estimates from Thomson Reuters called for $0.92 in earnings per share (EPS) on $30.95 billion in revenue. The same period from the previous year had $1.04 in EPS on $32.22 billion in revenue.

Prior to the release of the earnings report, a few analysts weighed in on Verizon:

RBC Capital Markets reiterated a Buy rating.
Citigroup downgraded to a Market Perform rating.
Oppenheimer downgraded to a Market Perform rating from Outperform.
Deutsche Bank reiterated a Hold rating with a $52 price target.
Macquarie reiterated a Neutral rating with a $55 price target.
Baird reiterated a Neutral rating with a $54 price target.
Argus reiterated a Buy rating.

So far in 2016 Verizon has outperformed the broad markets with the stock up 25%. Over the past 52-weeks the performance is roughly the same.

Shares of Verizon were last trading down about 0.6% at $55.77. The stock has a consensus analyst price target of $53.24 and a 52-week trading range of $38.06 to $56.95.

Shares of Yahoo were recently trading down 2.6% at $38.35, with a consensus analyst price target of $41.95 and a 52-week trading range of $26.15 to $39.42.

AT&T shares were recently trading down 0.6% at $42.87. The stock has a consensus analyst price target of $42.27 and a 52-week trading range of $30.97 to $43.89.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.