Veteran telecom analyst Michael Rollins of Citigroup has changed his rating on Verizon’s stock to “Buy” and also boosted his stock price target from $33 to $48, in what he called “a significant change” in his outlook on the company.

The move, and a recent uptick in Verizon’s stock price, could signal a change of heart on Wall Street regarding the kind of long-term infrastructure investment Verizon has made with its $18 million FiOS fiber-to-the-premises buildout.

At the heart of the change, Rollins said in his report, released late Thursday, is that, instead of looking at the erosion of Verizon’s traditional revenue base and the depletion of its cash by the FiOS buildout, investors instead choose to look at the company’s operating income before depreciation and amortization (OIBDA) and its growth potential.

“We got the call to sell Verizon wrong with the stock up roughly 15 percent since late last year,” Rollins wrote in the report. Much of that increase had come within the last month, he noted.

Verizon has come under heat from Wall Street for the $18 billion it says it will spend to build its FiOS FTTP network throughout its territory. The company told investors earlier this week that the service would be profitable in four years and that it expects to have 7 million customers by then. By contrast, AT&T is investing less money in a more conservative fiber-to-the-node strategy, and its stock has been outperforming Verizon’s by more than 15 percentage points, Rollins noted.

“We believe Verizon’s stock has room to catch up over the next 12 months,” he said.

Rollins cited five major factors for the change, including stable revenue growth for telecom and a recovering enterprise market, Wall Street’s willingness to value telecom even during periods of higher capital spending, minimization of near-term risks to Verizon, accelerating OIBDA growth which in 2008 should lead to double-digit earnings per share growth which outweighs capex concerns and the move to valuing companies based on OIBDA, creating “solid upside potential.”