Morgan Stanley On T-Mobile Earnings

In a report published Wednesday, Morgan Stanley analysts maintained an Overweight rating on T-Mobile US Inc TMUS, with a price target of $40. T-Mobile US reported robust 1Q15 earnings reflecting continued operational momentum. The company raised its guidance for postpaid net adds from 2.2 million-3.2 million to 3.0 million to 3.5 million. The analysts consider the guidance as "conservative." The company's total revenue came in at $7,778 million and EBITDA at $1,388 million, representing margin of 23.9 percent, ahead of Morgan Stanley's estimate. T-Mobile US reported strong branded postpaid phone net adds of +991K, higher than the Morgan Stanley estimate of +988K and consensus expectations of +966K. "T-Mobile captured 100% of the industry postpaid phone net adds in the first quarter," the analysts stated. T-Mobile's postpaid phone churn of 1.30 percent was higher than Morgan Stanley's estimate, consensus and management commentary during Un-carrier 9.0. The report enumerated some of the key takeaways of the company's latest quarterly results as troughing ARPU, improved porting and expected synergies in the near future. "T-Mobile's strong profitability trajectory and spectrum holdings warrant a higher multiple," the analysts added.