UPDATE: J.P. Morgan Raises PT on T-Mobile US Following Raised 2Q Postpaid Add Estimate

In a report published Wednesday, J.P. Morgan analyst Philip Cusick reiterated an Overweight rating on T-Mobile US TMUS, and raised the price target from $21.00 to $22.00.

In the report, J.P. Morgan noted, “We are raising our 2Q postpaid add estimate for T-Mobile US from zero to 300k driven by higher gross adds—we now estimate T-Mobile's gross add share to be 15.6% in 2Q from 11.4% in 1Q13. Beyond 2Q we raise subs slightly and look for +151k net adds for 2013 vs. -274k previously, though we model gross add share back in the 12-13% range after the iPhone boost has worn off. With 300k more gross adds we lower 2Q EBITDA by $124 million from $1.422bn to $1.288bn, or about $400 per gross add. Our working capital drag also increases (remember that handset subsidies are capitalized). In 2H our EBITDA estimate increases somewhat for the larger sub number, and for full-year 2013 we reduce slightly further to $5.597bn from $5.644bn vs. $5.8-6.0bn guidance. We remain confident that guidance will be reduced when the company reports 2Q but believe investors will be fine as long as that is driven by faster growth.”

T-Mobile US closed on Tuesday at $20.56.