Why Verizon Communications Inc. Shares Could Soar to $60

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Verizon Communications gained about 1% today after BTIG initiated coverage on the telecom giant with a buy rating.

So what: Along with the bullish call, analyst Walter Piecyk planted a price target of $60 on the stock, representing about 23% worth of upside to yesterday's close. So while momentum traders might be turned off by Verizon's year-to-date price sluggishness, Piecyk's call could reflect a sense on Wall Street that its wireless growth prospects are becoming too cheap to pass up.

Now what: According to BTIG, Verizon has one the best risk/reward trade-offs in the sector. "We believe that industry leader Verizon has positioned itself well to sustain some level of revenue growth and deliver EPS in excess of consensus estimates. Conversely, we expect AT&T to face revenue contraction in its core business and report EPS that shows no growth and falls below consensus," said Piecyk. "The key driver behind our divergent outlook between these two operators is the wireless business." When you couple those wireless growth prospects with Verizon's still-juicy 4%-plus dividend yield, it's tough to disagree with BTIG's total-return bullishness. 

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The article Why Verizon Communications Inc. Shares Could Soar to $60 originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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