Market Overview

Guggenheim: T-Mobile Set To Outperform Street Handset Estimates

The 12 Biggest Earnings Reports From Thursday
14 Stocks To Watch For February 7, 2019
Merger Arbitrage Mondays - February 18, 2019 (Seeking Alpha)

The latest T-Mobile US, Inc (NASDAQ: TMUS) conference commentary indicates the company will beat conservative handset estimates, according to Guggenheim.

The Analyst

Guggenheim’s Mike McCormack maintains a Buy rating on T-Mobile with an unchanged $85 price target.

The Thesis

The consensus handset net adds for Q4 is around 830,000, which assumes an “unrealistically high” change in churn from Q3 and suggests a 5 percent year-over-year decline in gross adds, McCormack said in a Wednesday note. The company is, therefore, likely to outperform the consensus expectation.

In view of the trends over the past couple of years and considering industry commentary on switcher volumes, a sequential decline in churn can be expected, driving a stronger handset add performance.

McCormack raised Q4 handset net adds estimate by 8.4 percent to 911,000 and the overall postpaid net add estimate for 2018 by 13.4 percent to 4.3 million. The estimate for the year is above than the high-end of T-Mobile’s guidance of 4.1 million. The higher estimate for net adds reflects stronger wearables as well as lower prepaid adds due to stiffening competition.

The revenue estimates for Q4 and 2018 have been raised from $11.2 billion to $11.3 billion and from $43.1 billion to $43.2 billion, respectively.

Price Action

Shares of T-Mobile were trading higher by 0.25 percent at $66.26 Thursday afternoon.

Latest Ratings for TMUS

Dec 2018Raymond JamesMaintainsStrong BuyStrong Buy
Oct 2018NomuraMaintainsNeutralNeutral
Oct 2018Wells FargoMaintainsOutperformOutperform

View More Analyst Ratings for TMUS
View the Latest Analyst Ratings

Posted-In: Guggenheim Mike McCormackAnalyst Color Analyst Ratings


Related Articles (TMUS)

View Comments and Join the Discussion!

Latest Ratings

MCDStephens & Co.Upgrades200.0
CZZJP MorganUpgrades13.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Day Market Update: Fred's Drops After Q3 Results; Adial Pharmaceuticals Shares Surge

Morgan Stanley Downgrades FireEye As Stock Meets Bullish Targets