G-255 Post Q2 Results with Trade Indicators for 1 Issuers for July 21, 2025

G – 255 Issuers reporting results Monday

Verizon (VZ, Baa1/BBB+ attractive long) Reported

Verizon (VZ, Baa1/BBB+, attractive long) Earnings Summary:

VZ reported 2Q operating revenue that rose 5.2% YoY and operating earnings that rose 4.5%.

Operating metrics while not spectacular were improved.

•3Q Consumer wireless service revenue rose 2.3% YoY to $17.4 billion.

•Consumer wireless retail postpaid churn was 1.12%

• Wireless postpaid average (ARPA) rose 2.3% to $147.50 YoY.

•Consumer postpaid wireless losses were -51,000 wireless versus a -109.000 loss in 2Q 2024.

•2Q Consumer prepaid wireless adds were 50,000 compared to a loss in 2Q 2024

•Consumer operating income was rose .5% YoY to $7.6 billion, an increase

•2Q EBITDA rose 2.1% to $11.2 billion, an increase of 2.1%.

•2Q EBITDA margin fell 200bp to 42.1% primarily due a decline in business revenue of 0.3% YoY

Financial Position:

• Verizon (VZ) provided guidance of 2.5% - 3.5% EBITDA growth for 2025.

• Cash from operations will grow slightly to between $37 - $39 billion.

• After capex and dividends Verizon net debt rose by over $1 billion to $142.5 billion.

• YoY net debt is $4.3 billion lower.

• Verizon's dividend growth has lagged the communications industry as the company continues to try to regain a single A credit rating which would have a material impact on earnings capacity.

Trading Model Indicator: While there are currently 40 secondary USD Verizon bonds totaling $76.1 billion, the entire VZ capital structure trades within 6.1% of its 52 week narrow spread.

However, Verizon has $22 billion of ST debt. During 1Q 2025 the company sold $2.25 billion of VZ 5 1/4 04/02/35 which has tightened by (-10bp) since the deal was priced on April 2.

There is a 60% chance that Verizon will sell more bonds in the month of July. The trading model indicator shows just 1 Verizon bond as undervalued. The VZ 2.65 11/20/40.

Equity Indicator: The model views VZ equity as an attractive at its current trading level of $40.84 per share with upside to $45.00 per share.

Disclaimer - This report is not intended as, and does not constitute an offer, or a solicitation to buy or sell any securities or financial instruments. All data, levels, opinions, and representations herein are provided for informational purposes only and should not be relied upon for making investment decisions. Past performance is not indicative of future results. The authors of this report assume no liability for losses or damages arising from the use of this information. Investors should consult with a qualified financial advisor before making any investment decisions. The information in this report is based on sources believed to be reliable, but no guarantee is made as to its accuracy, completeness, or timeliness.