UPDATE: BMO Capital Markets Initiates Coverage on Sprint Nextel Corporation with Outperform Rating, $9 PT Following DISH Offer

In a report published Thursday, BMO Capital Markets analyst Kevin Manning initiated coverage on Sprint Nextel Corporation (NYSE: S) with an Outperform rating and $9.00 price target.In the report, BMO Capital Markets noted, “We are initiating coverage of Sprint with an Outperform rating. We believe the DISH offer for Sprint Nextel has created a floor to support the shares at $7. Even if a better offer doesn't materialize, we think Softbank will prevail (shareholder vote is scheduled for June 12). We see long-term upside and our 2013 estimates are above consensus. Sprint's network overhaul has reduced costs and network performance seems to be improving. This should enable Sprint to better compete with AT&T and Verizon. We believe all the carriers are managing subsidies better and benefiting from a slowdown in smartphone innovation. We think Sprint will be a more credible competitor than T-Mobile and both will take share from AT&T and the standalone prepaid carriers. We believe Sprint's revised offer to acquire Clearwire should be sufficient to close the deal. The Clearwire shareholder vote on the deal is scheduled for May 31.”Sprint Nextel Corporation closed on Wednesday at $7.28.