The announcement of Verizon Communications Inc's (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 (PYPL  ), effective immediately, Funk said in the note.

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. (TMUS  ) and AT&T Inc. (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.