Buy Verizon on new growth opportunities, Trump's policies, Citi says

Pedestrians cross Herald Square in front of a Verizon Wireless store in New York.
Richard Levine | Corbis | Getty Images

Investors should buy Verizon Communications on its new business initiatives and the Donald Trump administration's economic agenda, according to Citi Research, which upgraded the telecommunications company to buy from neutral.

"Since the election, we have become more optimistic on the prospects for tax reform and have been able to better understand the potential benefits for Verizon. We also believe Verizon is likely to see a lighter touch from regulation," analyst Michael Rollins wrote in a note to clients Tuesday.

"We see an opportunity for multiple expansion given the prospects to improve free cash flow from a combination of expanding its addressable market for revenue, benefiting from potential tax reform, and improving its strategic position through M&A."