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Pro Analysis

Verizon’s new unlimited plan means its profits will decline this year, Goldman says

A pedestrian talks on a mobile device while walking past a Verizon store in San Francisco.
David Paul Morris | Bloomberg | Getty Images
A pedestrian talks on a mobile device while walking past a Verizon store in San Francisco.

Goldman Sachs reiterated its neutral rating on Verizon Communications because the increasingly competitive wireless landscape will drive its sales and earnings lower in 2017.

The telecommunications company announced Sunday it will offer an unlimited data, calls and texting wireless plan for $80 per month starting Monday.

"Verizon's move is yet another signal that wireless competition remains tough, and that Verizon is reluctantly adjusting to this more challenging environment," analyst Brett Feldman wrote in a note to clients Monday. "In our view, Verizon's decision to introduce an unlimited data plan indicates that the carrier is reluctantly adjusting to the sustained competitive intensity of the wireless market, which is one of the key factors why we are forecasting modest declines in revenue and EPS this year."

"In our view, Verizon's decision to introduce an unlimited data plan indicates that the carrier is reluctantly adjusting to the sustained competitive intensity of the wireless market, which is one of the key factors why we are forecasting modest declines in revenue and EPS this year."