BNP Paribas Slashes Verizon (VZ) Target - Leadership Turmoil Sparks Bearish Outlook

Another day, another price target cut - because apparently changing captains mid-storm always works out perfectly.

The French banking giant just downgraded Verizon's valuation metrics, citing uncertainty around the telecom's leadership shuffle. Because nothing says 'stable investment' like executive musical chairs.

BNP's analysts clearly aren't buying the transition narrative, trimming their expectations while Wall Street watches another legacy telecom struggle to find its footing. Meanwhile in crypto land, decentralized networks keep humming along without needing CEO announcements or boardroom drama.

Traditional finance keeps playing whack-a-mole with corporate governance issues while blockchain protocols automate trust. But hey, at least the analysts get to write fancy reports about it all.

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On Tuesday, BNP Paribas analyst Sam McHugh lowered his price target for VZ stock to $44 per share. However, the new target still suggests about 8% upside potential.

In early October, Verizon revealed that Dan Schulman, a former PayPal (PYPL) CEO, WOULD be its next CEO. Schulman, who was already on the company’s board, was picked to replace Hans Vestberg.

The replacement came as Verizon continues to face net losses from its postpaid phone subscriber base, amid competitive pressure from rivals such as Comcast (CMCSA), Charter (CHTR), and T-Mobile (TMUS) for its consumer wireless customers.

Does a CEO Switch Spell Growth for Verizon?

While TD Cowen analyst Gregory Williams earlier in the month raised his price target on VZ stock to $56.00 per share, seeing the leadership shift as a positive, BNP Paribas’ McHugh believes the CEO change raises questions about the company’s strategy.

McHugh, a three-star analyst on TipRanks with a 65% success rate, further argued that the leadership change raises doubt about how far Verizon is willing to go to defend its market share. Wells Fargo (WFC) also recently noted that the short-term setup for Verizon remains challenging.

Verizon Deal with AST Fails to Cheer Investors

The analyst’s downgrade comes despite Verizon’s recent deal with satellite operator AST SpaceMobile (ASTS) to expand its network coverage, particularly in remote locations across the U.S. Under the partnership, Verizon will integrate AST SpaceMobile’s low-Earth-orbit satellite into its existing terrestrial network to provide direct-to-device connectivity for cellphones nationwide.

However, the deal only added momentum to ASTS stock — the satellite provider’s shares have risen more than 281% since the start of the year. By contrast, VZ stock has increased by only about 9% during the same period, with a rare bullish options signal reported recently.

Is Verizon a Buy, Hold, or Sell?

Across Wall Street, Verizon’s shares currently hold a Moderate Buy consensus rating, according to TipRanks. This is based on eight Buys and 10 Holds issued by 18 analysts over the past three months.

However, the average VZ price target of $48.03 suggests a growth possibility of about 19% from the current level.