Verizon Communications has warned its Fios TV customers that certain channels owned by Hearst Television may not be available next year, as the multimedia company was demanding higher rates to broadcast its channels on the telecom’s fiber optic networks.
Hearst TV’s channels like WBAL-NBC in Baltimore, WGAL-NBC in Harrisburg, WTAE-ABC in Pittsburgh, WCVB-ABC and WMUR-ABC in Boston/Manchester are available for Verizon Fios customers.
Verizon (VZ) said, “The unreasonably high rate hikes proposed by Hearst is the latest in a series of escalating demands that show the retransmission model is fundamentally broken. Verizon maintains that this anti-consumer practice is unsustainable, both in current conditions and looking forward, so we must push back and foster a system that better meets consumer needs.”
The company added “On January 1, 2021, Fios customers in select markets may lose the ability to watch their favorite programming, including local news, major live sporting events and other notable entertainment. Though Verizon hopes to reach an agreement that gives customers continued access, Hearst Television may choose to remove channels from Fios TV.”
Earlier on Dec. 2, MoffettNathanson analyst Craig Moffett upgraded the stock to Buy from Hold and raised the price target to $66 (12.2% upside potential) from $59.
The analyst said that the stock is trading at an “unprecedented discount to the S&P 500.” He added that “with an attractive – and apparently safe – dividend yield in a yield-starved market, we believe Verizon’s total return prospects are sufficient to warrant our more constructive outlook.”
The stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 4 Buys, 7 Holds and 1 Sell. The average price target of $62.33 implies upside potential of about 6% to current levels. Shares have declined by 4.2% year-to-date.