Verizon (VZ) stock is worth buying, according to analysts at Morgan Stanley.
The company’s wireless business is growing, and its wireline business is in good shape, the analysts said in a note to clients. Verizon’s cash flow is also strong, they added.
The analysts said they are raising their rating on Verizon stock to ” overweight ” from “neutral.” They also reiterated their buy rating on the stock.
“We believe VZ’s wireless business is still in its early stages of secular growth and is a key growth driver,” the analysts said in their note. “Wireless margins are expanding, and we expect them to continue to do so as VZ invests in its network.”
Verizon’s wireline business is benefiting from improving broadband speeds and the growth of video services, the analysts said.
“We continue to see good momentum in Verizon’s wireline business, benefiting from improving broadband speeds and the growth of video services,” they added. “We expect wireline margins to expand over the next few years as Verizon invests in its network.”
The analysts said they believe Verizon’s stock is undervalued and that it is worth buying at its current price.