Sprint's Improvement Needs To Pick Up The Pace

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The turnaround story for
Sprint CorpS
is
moving in the right direction
, but analysts at Citi would like to see some faster improvements. Citi is hoping for a pivot toward more marketing and network investments in order to meet that end-goal.

"The pace and magnitude of improvement with respect to key operating metrics is still slower than we would like to observe," said Citi analysts.

T-Mobile US IncTMUS
's strong Q3 set a high bar for its low-cost carrier competitor through its marketing and cash-flow turnaround. Sprint reported a Q3 that showed improved postpaid gross adds and cut expenses, but a "reduction in capex guidance may delay the pace of improvement and differentiation," according to Citi's recent analyst note.

Positives

  • Postpaid phone gross adds increased 20 percent year-over-year.
  • Sprint was port positive against all three national carriers.
  • Postpaid churn fell to 1.37 percent.

Negatives

  • Prepaid losses continue with 2 million disconnects expected in Q4.
  • Net debt leverage remains high.

Citi has a $7 price target on Sprint, while the rating remains at Neutral. The stock was down 2 percent at $6.37 at last check.

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Posted In: Analyst ColorEarningsNewsGuidancePrice TargetAnalyst RatingsMoversTechCiti
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