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T-Mobile Is The 'Best Fundamental Investment' In Wireless; M&A Conversations Could Start This Week

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T-Mobile Is The 'Best Fundamental Investment' In Wireless; M&A Conversations Could Start This Week

T-Mobile US Inc (NASDAQ: TMUS) shares are moving higher Tuesday following the company’s first-quarter earnings release that saw 1.1 million net additions. As the mobile provider continues to take market share, M&A talks are starting to heat up with the industry quiet period for the 600 MHz auction set to end Thursday.

M&A Talks Heat Up

“We continue to prefer T-Mobile as the best fundamental investment in the wireless space because the runway for subscriber share growth remains long and shares may benefit further from potential industry consolidation,” said JPMorgan following the first-quarter earnings release.

Shares of potential takeover target Sprint Corp (NYSE: S) have spiked higher following the news as well. JPMorgan sees the possibility of merger deal being attempted and approved between both companies at 40 percent in the near term.

Despite increasing competition, analysts are predicting subscriber guidance numbers to continue to increase through the year. JPMorgan reiterated its Overweight rating and $71 price target on the company.

Beyond M&A

On top of potential merger activity, T-Mobile has aggressive distribution plans in the works.

“The company plans on expanding distribution by opening 1,500 T-Mobile stores (vs. 400 in 2016) and another 1,500 prepaid stores this year, which should keep gross add share numbers tracking higher and offset rising churn from the company’s steadily growing base.”

Related Links:

Sprint Stock Is Soaring; Possible Merger In The Works?

T-Mobile: Market Share Gains Continue, Time To Talk M&A? 

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Latest Ratings for TMUS

DateFirmActionFromTo
Nov 2020Raymond JamesMaintainsOutperform
Nov 2020Wells FargoReinstatesOverweight
Nov 2020Morgan StanleyMaintainsOverweight

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View the Latest Analyst Ratings

 

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