Analysts Cut Targets After Sprint Corp. Cuts Prices

Sprint Corp.

recent move to cut prices 25 percent spurred a couple of analysts Wednesday to do their own cutting. Canaccord's Greg Miller cut his price target to $5.75 from $7.50 and Barclays' Amir Rozwadowski cut his target to $6 from $9. Both analysts maintained Hold ratings. Given the well-known inferiority of Sprint's network compared with competitors, "it's unlikely that pricing alone will generate meaningful subscriber growth," Miller said in a note. Lower prices will of course decrease the average revenue Sprint derives per user, while higher costs --partly in the form of a $350 early termination fee reimbursement offered new customers -- will squeeze Sprint's profit margin, Miller said. Rozwadowski doesn't expect "too many ripples" elsewhere in the industry from Sprint's recent price move. "But if Sprint is successful in its network improvement endeavors, then other carriers may be compelled to respond," Rozwadowski said in a note. Sprint traded recently at $5.68 a share, down 1.6 percent.