New Zealand Markets closed

Nomura upgrades Verizon, says big will get bigger

NEW YORK (AP) -- Nomura Securities on Monday upgraded shares of Verizon Communications Inc. from "Neutral" to "Buy," saying the U.S. market leader in wireless has a head start on new technology and is unlikely to lose out to smaller rivals, even though those companies are strengthening their hands.

"We believe Verizon Wireless's superior execution will continue to drive higher profitably, with competitive risks more a concern for the low end of the wireless market," analyst Mike McCormack wrote.

No. 3 carrier Sprint Nextel Corp. is selling a majority stake to Softbank of Japan, providing an infusion of fresh capital. No. 4 carrier T-Mobile USA has struck a deal to buy No. 5 MetroPCS Communications Inc. to bulk up on airwaves that will allow it to expand its wireless data services.

McCormack noted that Verizon Wireless is the leader in so-called "fourth-generation," or "4G" wireless services, which provide higher data speeds, and in offering new "shared data" plans. That sets it up to benefit from increased wireless data consumption, he said.

He raised his price target slightly, from $49 to $50.

New York-based Verizon Communications owns 55 percent of Verizon Wireless. The rest is owned by British cellphone company Vodafone Group PLC. Verizon Communications also provides wired phone and TV services.

Verizon Communications shares rose 29 cents to $44.41 in midday trading. A 13-year high of $48.77 was hit on Oct. 1.