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Verizon Communications Inc. recently offered a better-than-expected earnings outlook for the year ahead, but fears linger about how the telecommunications company will fare as new competitive pressures hit the wireless industry.

J.P. Morgan analyst Philip Cusick downgraded Verizon’s stock VZ, -0.11% to neutral from overweight Wednesday, writing that he is “increasingly concerned about the subscriber growth outlook for postpaid phones in 2022 for Verizon and the industry overall,” given the evolving competitive landscape.

He warns that the first quarter tends to be “difficult” for Verizon due to seasonal patterns, but Cusick has concerns that stretch beyond that period.

Read: Verizon, AT&T to limit 5G near airports to prevent flight delays, cancellations

Despite already high competition in the industry, new dynamics could bring challenges for Verizon. Cusick cites the prospect of new supply as carriers begin to deploy their C-Band spectrum, Dish Network Corp. DISH, +0.88% builds out its wireless business, and cable companies work on small-cell efforts.

“Beyond fixed wireless broadband, this additional capacity could incent carriers to chase incremental subscribers or usage, resulting in even less competitive discipline than we have seen in recent times,” he wrote.

Cusick sees limited opportunities for Verizon to deliver growth upside and doubts the company will be able to conduct buybacks in the near term given its heavy spending on C-Band spectrum and the possibility of interest-rate headwinds.

Verizon shares trade at 9.7 times Cusick’s estimates for 2022 adjusted EPS, a multiple that he says “seems low but not inappropriate for a company with no earnings growth.”

Shares of Verizon are off 0.4% in premarket trading Wednesday.

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Cusick’s downgrade comes on the same day that AT&T Inc. posted its quarterly results and a day after Verizon did the same. Several other analysts voiced concerns about Verizon’s growth prospects following that report.

Verizon shares have dropped 0.3% over the past three months as the Dow Jones Industrial Average DJIA, -0.19% has lost 4.1%.

Source: This post first appeared on http://marketwatch.com/

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