UPDATE: J.P. Morgan Downgrades Leap Wireless to Underweight on Subscriber Trends, Competition, Cash Flow
In a report published Monday, J.P. Morgan analyst Philip Cusick downgraded the rating on Leap Wireless International (NASDAQ: LEAP) from Neutral to Underweight, but reiterated the $5.00 price target.
In the report, Cusick noted, “The company's mostly 3G-level products and network seem more and more commoditized as MVNOs get more aggressive in the prepaid smartphone data space, and without a sufficient capex budget Leap has little ability to make the transition to 4G service. We expect TMobile to launch its MetroPCS brand across a number of Leap markets before the end of the year, and most of the footprint by the end of 2014. Additionally, we expect AT&T to launch a new prepaid brand, ‘AT&T All in One' in May/June that will target not only Leap subscribers, but its dealers as well. Finally, we don't expect any M&A this year.”
Leap Wireless International closed on Friday at $6.22.
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