UPDATE: J.P. Morgan Downgrades NTELOS Holdings Corp. to Neutral, Lowers PT

In a report published Wednesday, J.P. Morgan & Co. downgraded its rating on NTELOS Holdings Corp. NTLS from Overweight to Neutral, and lowered its price target from $20.00 to $10.00. J.P. Morgan noted, “We believe that Sprint and nTelos are both better off negotiating a deal than seeing Sprint overbuild nTelos's territory in 2015. However, we believe that Sprint's overbuild alternative has become more attractive with the Softbank deal that allows the company more flexibility to invest up front in high return capital projects. Regardless of whether it would cost $100m or $200m to overbuild nTelos's 2m pops, both pale in comparison to the $174m that we estimate Sprint will pay nTelos in roaming fees just in 2013. Thus, we now assume that nTelos's roaming income will decline by 50% y/y in 2H15 after the current contract expires. We are downgrading nTelos from Overweight to Neutral with a $10 price target vs. $13.11 close.” NTELOS Holdings Corp. closed on Tuesday at $13.11.