Citadel Initiates Coverage on Leap Wireless and MetroPCS (LEAP, PCS)

Citadel is out with its report today on Leap Wireless

and MetroPCS

, initiating coverage on LEAP and PCS. In a note to clients, Citadel writes, "The U.S. wireless industry in the midst of a shift in favor of prepaid (nocontract) versus postpaid (contract) tiers. We initiate coverage on two of the larger beneficiaries of this secular trend, Leap Wireless (Edge Positive, $22 PT) and MetroPCS (Neutral, $18 PT). While Leap and Metro have historically benefited from targeting the 'low-end' consumer, we believe that their future growth will come from the evolving 'middle tier' of the market." Shares of LEAP closed Tuesday at $15.70. Shares of PCS closed Tuesday at $17.55.