Communications stock Verizon (VZ) is about to get quite a bit bigger and press into some markets it had previously abandoned. Shareholders at Frontier Communications (FYBR) approved an offer from Verizon to buy the company, and Verizon shareholders seem all in favor. Verizon shares ticked up modestly in Wednesday afternoon’s trading as a result.
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Verizon will be landing Frontier for a comparative bargain, a Reuters report noted, as it will shell out $9.6 billion to buy the company. Several major investors in Frontier were working on landing a higher price, but shareholders overall went with the bird in the hand rather than the two in the bush.
The deal will take a year and a half to close, but once it does, Verizon will pick up around $10 billion worth of Frontier’s debt and pay $38.50 per share for the stock. That represents a 44% premium against its 90-day volume-weighted average. Meanwhile, Verizon CEO Hans Vestburg declared the deal a “strategic fit” that would give Verizon access to several new markets.
Barbie Boost
Meanwhile, Verizon is looking to turn to a little celebrity support to promote its home internet. Barbie will be stepping in, along with Ken, to kick off the “Barbie StreamHouse” campaign. With this campaign, Verizon will show off all the different ways that Verizon Home Internet can make a house better just in time for the holidays. This includes applications like gaming and streaming, as well as connected home devices.
Is Verizon Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on VZ stock based on eight Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 19.88% rally in its share price over the past year, the average VZ price target of $46.47 per share implies 13.88% upside potential.
