(Reuters) - Several brokerages raised their price target on Verizon Communications Inc's <VZ.N> stock, upbeat on the company's potential in its mobile phone business as a growing number of customers switch to high-margin smartphones.
On Thursday, Verizon posted quarterly profits in line with analysts' estimates as it added more wireless subscribers than anticipated.
Analysts said Verizon's leadership in its U.S. mobile phone market will continue to drive growth and help it gain a larger share of the postpaid market with growing adoption of the Long Term Evolution (LTE) mobile standard.
LTE technology -- pegged as the successor for 3G mobile voice and data standards -- promises broadband-like internet speeds on mobile handsets.
"We expect Verizon to continue to gain postpaid market share given its industry leading churn, a leadership position in LTE and the expected release of an LTE capable iPhone as soon as the fourth quarter," Citi Investment Research analyst, Michael Rollins wrote in a note.
He raised his price target on the stock to $45 from $44.
Verizon Communications' mobile phone joint venture with UK's Vodafone Group Plc <VOD.L> added 888,000 net new subscribers in the second quarter, compared with the average expectation of about 666,000 of seven analysts.
J.P. Morgan Securities analyst Philip Cusick said Verizon's wireless EBITDA margin could exceed a record 50 percent in the current quarter driven by smartphone sales and an expected iPhone launch later in September.
EBITDA margin, based on the segment's earnings before interest, tax, depreciation and amortization, was 49 percent in the second quarter, ahead of average estimates of five analysts for just above 47 percent.
Cusick raised his price target to $49 from $45.
At least seven other brokerages also raised their price target on the Company's stock which provides communication, information and entertainment products and services to consumers, businesses and governmental agencies.
Verizon shares fell 1.5 percent to $43.85 on the New York Stock Exchange on Friday.
(Reporting By Aurindom Mukherjee in Bangalore; Editing by Joyjeet Das)