Jennifer Fritzsche, Senior Analyst at Wells Fargo, has a lot of questions about Verizon (VZ) after their recent sell side meeting in New York City. Since August 22, the date of Wells Fargo’s downgrade of T-Mobile (T), VZ is up 10.5 percent versus the market of -5.6 percent and T down 9.7 percent.
“Given VZ’s strength versus its closest competitor, investors seem to be wondering if this will be a source of funds once we get to 2019…only 25 trading days away!” Fritzsche said. Reports from the meeting by analyst Nicole Black of Wells Fargo’s High Grade team netted some noteworthy comments from CEO Hans Vestberg. The first phase of the network transformation, Vestberg said, was the decision to build an intelligent edge network.
“This is setting the stage going forward for ‘both 5G and many other things’” Fritzsche said, quoting Vestberg. “This is interesting because the message under prior CEO McAdam was only mainly the network. And while the other messaging from the recent sell-side meeting was ‘we wake up every day and focus on building best network we can,’ we still think it is somewhat curious VZ recently brought on the person who led Media & Communications M&A activity for Morgan Stanley to be Head of Corporate Development,” she said.
“My point being, this ‘many other things’ comment could lead VZ down a path which the prior CEO seemed to rule out,” Fritzsche said. “If this is the case, this could cause some change in the VZ shareholder base, as they may all be looking down one road – and VZ may be planning on taking another.”
November 27, 2018
