Research note · 6 October 2026
Verizon Communications Inc VZ
LONG price $45.98 · base case $62.66 · expected +25% over 540 days
The call
Verizon trades at $45.98, implying a market-implied FCFF growth of -1.82% at the 8.31% WACC, i.e. the market prices a permanently shrinking telecom business. The base case assumes 2-3% FCFF growth, consistent with management's 2.5-3.0% mobility and broadband revenue guidance and 9-10% FCF growth, yielding a DCF value of $62.66 per share, 36.3% above the price.
Why the opportunity exists, in the desk's view: a narrative overshoot.
What decides the case
- Revenue growth trajectory through the transitional year
- Cost structure transformation and Frontier integration
- Debt refinancing and interest burden
What breaks the case
| Shock to the base case | Value per share | vs price |
|---|---|---|
| Base case as planned | $62.66 | 36% |
| Starting cash flow 10% higher | $72.86 | 58% |
| Growth 5 points higher every year | $87.01 | 89% |
| Discount rate 100bp higher | $48.71 | 6% |
| Starting cash flow 10% lower | $52.46 | 14% |
| Growth 5 points lower every year | $42.41 | -8% |
| Cost of debt 200bp higher | $52.05 | 13% |
The base case equals the price at a 9.5% discount rate, or if every year's growth were -4.0% points different. Thresholds, not forecasts.
Exposures
- Interest rates, negative for the equity
Model-authored research with an editorial gate; every figure traces to the filing or a stated assumption and every calculation was reproduced before publication. Not investment advice. Do not redistribute.