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Citigroup Just Added T-Mobile To Its Focus List

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In a report published Wednesday, Citigroup analyst Michael Rollins maintained a Buy rating and a $40 price target on shares of T-Mobile US Inc (NYSE: TMUS), but added the company to the "Citi Focus List" based on the potential catalysts for multiple expansion over the next 12 months.

According to Rollins, T-Mobile should improve its Operating Income Before Depreciation And Amortization (OIBDA) over the next three quarters. The analyst added that the Factset consensus OIBDA for the first quarter of $1.43 billion does seem high (as he is projecting an OIBDA of $1.27 billion), but investors have begun to anticipate stronger growth.

Rollins continued that following Verizon Communications Inc. (NYSE: VZ)'s first quarter results, Verizon and T-Mobile seem to be "increasingly segmenting" the category between reliable quality and urban value, respectively.

As such, the analyst stated that T-Mobile could expand its addressable market over the next year that can bolster its pace of market share improvement and expand its coverage with the deployment of 700 MHz spectrum using LTE technology.

In addition, T-Mobile is expanding into new segments, including its recently-launched attractively-priced rate plans for business clients.

The company has a low market share in the segment, and its Un-carrier initiatives with free WiFi calling, free International roaming, and data stash should see some success among urban, business customers, especially as its LTE geographical coverage footprint should improve during 2015.

Rollins reiterated his prior estimates that T-Mobile could growth its service revenue by about 10 percent in 2015 to $24.8 billion and by 9.9 percent year over year in the first quarter to almost $5.9 billion.

Latest Ratings for TMUS

DateFirmActionFromTo
Apr 2021Deutsche BankMaintainsBuy
Mar 2021OppenheimerMaintainsOutperform
Feb 2021Raymond JamesMaintainsOutperform

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Posted-In: Citigroup LTE Michael Rollins OIBDAAnalyst Color Long Ideas Analyst Ratings Trading Ideas

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