Scotiabank reduced its price target for Verizon Communications Inc. to $48 from $51 on January 7, maintaining a Sector Perform rating. The adjustment was part of a broader review of telecom services targets ahead of fourth-quarter earnings.
The firm observed that wireless promotions were particularly aggressive during the holiday season. Despite this, it indicated the industry continues to grow, with overall revenue and EBITDA trends remaining positive.
Verizon generated $28 billion in cash flow from operations through the first nine months of the year. This covered $12.3 billion in capital spending and $8.6 billion in dividends, leaving approximately $7.2 billion in surplus cash. The company has been using this extra cash to strengthen its balance sheet.
Verizon anticipates further improvement in free cash flow by 2026. A central element of this outlook is its planned $20 billion all-cash acquisition of Frontier Communications. The deal is expected to expand Verizon's broadband reach and facilitate bundled mobile and home internet services.
For dividend investors, Verizon's cash flow position supports the potential for continued dividend increases over time. The company is listed among 13 best dividend stocks paying over 6%.