UPDATE: Guggenheim Upgrades Leap Wireless International to Buy; Strategy Trumps Seasonality

Guggenheim raises its rating on Leap Wireless International

from Neutral to Buy and increases its price target from $8.50 to $10. Guggenheim says, "We downgraded Leap following its 1Q12 earnings report, when management indicated a shift in strategy that seemed contradictory to our earlier thesis. However, we now believe the new strategy makes sense and could drive improved results going forward. …With smartphone penetration already at 50%+, we believe increasing device price points could help reduce the tendency of existing users to upgrade. Higher-end devices do not necessarily carry higher subsidies." LEAP closed at $6.00 on Tuesday.