UPDATE: BMO Capital Markets Initiates Coverage on Leap Wireless International with Underperform Rating, $3 PT on Continued Headwinds

In a report published Thursday, BMO Capital Markets analyst Kevin Manning initiated coverage on

with an Underperform rating and $3.00 price target. In the report, BMO Capital Markets noted, “We are initiating coverage of Leap Wireless (LEAP) with an Underperform rating. We believe the industry migration to smartphones continues to create headwinds for standalone prepaid carriers such as Leap. Several Sprint brands already offer more compelling alternatives, in our view, and we expect additional competition from T-Mobile/MetroPCS, and AT&T. We believe the costs to acquire Leap for its spectrum is greater than the value of the spectrum.” Leap Wireless International closed on Wednesday at $5.70.