The announcement of Verizon Communications Inc's (NYSE:VZ) CEO change was surprising, both in terms of timing and selection, according to BofA Securities analyst Michael Funk.

The Verizon Communications Analyst: Funk maintained a Neutral rating and price target of $49.

The Verizon Communications Thesis: The company has replaced CEO Hans Vestberg with Dan Schulman, former CEO of PayPal Holdings Inc (NASDAQ:PYPL), effective immediately, Funk said in the note.

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The move raises questions about whether more executive changes are in the offing and "could signal a change in strategic direction but the path is unclear," he added.

Investors appear to be dissatisfied with Verizon’s losses in its retail post-paid phone subscribers and its less aggressive FWA (fixed wireless access) strategy compared to those of rivals T-Mobile US Inc. (NASDAQ:TMUS) and AT&T Inc. (NYSE:T), the analyst stated.

AT&T has the most flexibility to "both compete effectively and return capital, which we view as the best opportunity for driving stock performance," he further wrote.

VZ Price Action: Shares of Verizon Communications had risen by 0.68% to $41.73 at the time of publication on Tuesday.

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