Many Deals Make Sense For T-Mobile, But Don't Expect Legere To Cede Operational Control

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M&A speculation within the wireless sector is shows no signs of cooling down.

Over the weekend, Comcast Corporation CMCSA and Charter Communications, Inc. CHTR struck an agreement in which neither company will oversee the merger or acquisition of a wireless company without the other's consent for a period of one year.

Coinciding with Comcast and Charter's agreement, Amir Rozwadowski of Barclays maintained an Overweight rating on T-Mobile US Inc TMUS stock with a $70 price target. The analyst highlighted the fact that there are scenarios for T-Mobile in which a deal makes sense, the fact is the company is unlikely to give up operational control.

Among the many M&A rumors and chatter floating around, the analyst sees a combination with Sprint Corp S making the most sense. However, any deal would likely need to include notable incentives such as break fees and financial terms for T-Mobile. At the end of the day, any deal would still require navigation through a "still uncertain regulatory backdrop."

According to Rozwadowski, T-Mobile sees a continued path towards ongoing profitable subscriber growth. The analyst recently visited the company's headquarters and left "encouraged" with its organic prospects and its ability to continue evolving in the competitive landscape.

Bottom line, T-Mobile is unique within the wireless sector as it is a company that boasts the ability to gain market share and improve its cash flow.

See Also:

T-Mobile Proves It Can Continue To Take Market Share, Best Play For Wireless Consolidation

T-Mobile Vs. AT&T: Who Has The Better Outlook For 2017?

Image credit: Mike Mozart, Flickr

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Posted In: Analyst ColorSmall Cap AnalysisAnalyst RatingsTechTrading IdeasAmir RozwadowskiBarclayswireless
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