Credit Suisse analyst Matthew Niknam spoke with T-Mobile US Inc TMUS this week to get a better sense of where the third-largest U.S. telecom company is headed for the remainder of 2017.
“Bottom line, we came away positive on [T-Mobile's] ability to execute amidst an increasingly challenging competitive backdrop,” said Niknam in a note.
That said, the analyst’s rating and price target remained unchanged at Hold and $69.
Catalysts
Despite seasonally slower volumes all-around in the second quarter and increased headwinds from aggressive postpaid phone competition from Verizon Communications Inc. VZ and AT&T Inc. T unlimited plans, the analyst expects T-Mobile to maintain its market share, while several second half 2017 catalysts could drive prepaid growth.
- The release of Apple Inc. AAPL's iPhone 8 should drive more consumers to switch to T-Mobile, as indicated from historical data.
- Progress on the company’s build out of the new 600 MHz spectrum will improve coverage in under-penetrated regions.
- The company should see greater B2B growth, a space in which T-Mobile’s current share is less than 5 percent.
In The Long Term
“[T-Mobile] has leveraged aggressive network investments and a unique customer value proposition to grow share in recent years,” said Niknam
These investments have driven its scale, which should soon become apparent in the form of a free cash flow ramp up. Niknam believes that catalysts have been delayed though, due to heightened defensive strategies from competitors.
Finally, despite swirling rumors of a merger between T-Mobile and Sprint Corp S, it seems doubtful that the Federal Trade Commission would allow one to go through.
Related Links:
Pitting 2 Telecom Names Against Each Other: Expect AT&T To Underperform Verizon
Stating The Obvious: A Successful Time Warner Acquisition Will Be A Game Changer For AT&T
Image: Mike Mozart, Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.