u/deepvaluedude

The author rates Verizon Buy with a 2-year price target of ~$72, arguing the market has not yet fully priced the medium-term earnings power and free cash flow generation potential of the combined entity after the $20B Frontier Communications acquisition. Catalysts include CEO Dan Schulman's operational overhaul with 13,000 job cuts, 616,000 Q4 2025 postpaid phone net adds with FY2026 guidance of 750K–1M, the AST SpaceMobile satellite partnership, FY2026E FCF of $21.5B+ enabling a new $25B buyback, and a 5.8% dividend yield. The author's valuation path to $62–$72 by 2028 assumes Fed funds fall to 2.0–2.5%, compressing WACC and expanding the P/E from 10.0x forward.

The author argues Vodafone has transformed from a distressed conglomerate into a disciplined growth-focused connectivity platform, creating a valuation dislocation. The investment mechanism is a re-rating from FY27 onward as Germany recovers, UK merger synergies arrive, SatCo satellite optionality is recognized, and buybacks shrink the share count. The author's FY28 sum-of-parts target is about $25 per ADR, with the main stated risk that the market remains fixated on the German MDU transition and historical debt bloat.