U.S. Markets close in 4 hrs 17 mins

Piper Jaffray upgrades Verizon to 'Outperform'

NEW YORK (AP) -- Verizon's superior wireless network should let it continue to outperform other carriers and produce cash for shareholders, a Piper Jaffray analyst said Friday as he upgraded the stock to "Outperform" from "Neutral."

Verizon Wireless manages to pull in more customers than other carriers even though it charges more, analyst Christopher Larsen wrote. He raised his price target on the shares of parent company Verizon Communications Inc. from $45 to $50. They last traded at that level in early 2002, as the telecom and Internet boom was winding down.

Verizon Communications shares rose 88 cents, or 2 percent, to $44.49 in afternoon trading. The average analyst price target for the shares is at $47.79, according to data provider FactSet.

New York-based Verizon Communications owns 55 percent of Verizon Wireless. The rest is owned by Vodafone Group PLC, a British cellphone company. Verizon Communications has fixed-line operations as well, and Larsen said the company's expensive upgrade of many of these lines to optical fiber under the FiOS brand may be bearing fruit in the shape of lower operating and maintenance costs.

Larsen acknowledged that Verizon shares don't look cheap, trading as they are at 16 times his estimate for 2013 earnings per share. But he said the increasing importance of wireless, and the company's generous dividend should support a higher value.