Verizon stock rises on BT JV charges and severance costs
Verizon Communications Inc. shares rose in premarket trading following a decline triggered by its exit from the Dow Jones Industrial Average. The company announced a 50-50 joint venture with BT Group Plc, involving a $625 million cash payment and expected Q2 2026 charges of $700 million to $800 million for held-for-sale assets, alongside severance and asset rationalization costs. Technical indicators show the stock trading below key moving averages, while analysts project an EPS of $1.28 for the upcoming earnings report on July 24, 2026.
*this image is generated using AI for illustrative purposes only.
Verizon Communications Inc. shares rose 0.45% to $42.18 during Thursday's premarket session as investors assessed the financial impact of the company's exit from the Dow Jones Industrial Average and a new joint venture with BT Group Plc. The stock is recovering from a 3.19% decline on Tuesday, driven by mechanical selling from index-tracking funds following its replacement by Alphabet Inc. in the Dow. Despite the recent uptick, Verizon faces significant one-time charges in the second quarter of 2026, totaling up to $1.55 billion, which will affect its near-term profitability.
Joint Venture and Financial Impact
On June 28, 2026, Verizon entered into a Transaction Agreement with BT Group Plc and Jasper NewCo Limited to form a 50-50 joint venture. Verizon will contribute its international wireline connectivity and managed network services business to NewCo, while BT will contribute its corresponding operations. Verizon will make a $625 million cash payment to NewCo, which will be distributed to BT, to secure its 50% equity stake. The transaction is subject to regulatory approvals and customary closing conditions.
Verizon expects to record a loss of $700 million to $800 million in Q2 2026 related to classifying the contributed business as held for sale. Additionally, the company anticipates severance charges of $350 million to $450 million due to headcount reduction initiatives and asset rationalization charges of $200 million to $300 million, primarily tied to ceasing the use of certain real estate and network assets. The transaction is expected to be accretive to Verizon Business Group EBITDA in Q2 2026 as net assets move to Corporate and other segments.
| Charge Type | Estimated Amount |
|---|---|
| Loss on assets held for sale | $700 million – $800 million |
| Severance charges | $350 million – $450 million |
| Asset rationalization charges | $200 million – $300 million |
Technical Analysis and Market Position
Verizon is trading below its key moving averages, indicating a sustained downtrend. The stock sits 7.6% below its 20-day simple moving average (SMA), 9.6% below its 50-day SMA, 11.9% below its 100-day SMA, and 5.1% below its 200-day SMA. Momentum indicators remain soft, with the MACD below its signal line and a negative histogram. Technical resistance stands near $48.50, while support is around $39.00. The moving average structure shows a bearish near-term trend, as the 20-day SMA is below the 50-day SMA, though the 50-day SMA remains above the 200-day SMA following a golden cross in February.
Wireless services drive approximately 75% of Verizon's total service revenue and nearly all of its operating income. The company serves about 94 million postpaid and 20 million prepaid phone customers, making it the largest U.S. wireless carrier. On the wireline side, Verizon's networks reach about 30 million homes and businesses in the Northeast, including 20 million served by the Fios fiber-optic network. The acquisition of Frontier Communications, closed in January, added networks reaching another 15 million locations.
Earnings Outlook and Analyst Ratings
Verizon is scheduled to report its next earnings on July 24, 2026. Analysts expect earnings per share of $1.28, up from $1.22 a year earlier, on revenue of $35.34 billion, compared with $34.50 billion last year. The stock maintains a Buy rating with an average price target of $50.68. Recent analyst actions include Freedom Broker initiating coverage with a Hold rating and a $53 price target, JPMorgan raising its target to $52, and Morgan Stanley increasing its target to $50. Verizon has a market capitalization of about $175.9 billion, a P/E ratio of 10.2, and a dividend yield of 6.74%.
How will the Verizon-BT joint venture impact the company's competitive positioning in the global managed network services market?
Will the anticipated one-time charges in Q2 2026 delay Verizon's ability to return to sustained profitability growth?
Can Verizon break through the $48.50 technical resistance level despite the bearish momentum indicated by the moving averages?
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