Market Overview

Raymond James: T-Mobile, Sprint Merger A Factor In 5G Race With China

Share:
Raymond James: T-Mobile, Sprint Merger A Factor In 5G Race With China

The pending merger between T-Mobile US Inc. (NASDAQ: TMUS) and Sprint Corp (NYSE: S) has received approval from the Committee on Foreign Investment in the U.S.

The probability of the merger receiving the required regulatory approvals has risen from 65 percent to 80 percent, according to Raymond James.

The Analyst

Raymond James analyst Ric Prentiss maintained a Strong Buy rating on T-Mobile and raised the price target from $85 to $86.

The Thesis

Japan's Softbank owns around 84 percent of Sprint, and Germany’s Deutsche Telekom has a stake of around 63 percent in T-Mobile. The merger is being framed as a help to the U.S. in gaining a lead over China in 5G deployment, Prentiss said in a Tuesday note. 

The telecom merger is “picking up political momentum in the Trump administration,” which has increased the probability of it being approved, the analyst said, adding that a decision on the merger could be rendered early next year.

T-Mobile is attractive both on a standalone basis and as a merged entity, Prentiss said. T-Mobile’s standalone business is improving in terms of churn, net adds and ARPU, he said. 

The merged companies should be able to fully realize synergies in 2024, according to Raymond James. The new company's operational and non-operational value discounted back to year-end 2019 suggests a fair value of $87 per share, in the sell-side firm's view. 

Price Action

T-Mobile shares were down 0.91 at $64.28 at the time of publication Thursday. 

Related Links:

With Valuation Priced In, Morgan Stanley Downgrades Verizon

Verizon's Voluntary Layoffs: What You Need To Know

Public domain photo via Wikimedia.

Latest Ratings for TMUS

DateFirmActionFromTo
Nov 2019DowngradesBuyHold
Nov 2019MaintainsStrong Buy
Oct 2019MaintainsStrong Buy

View More Analyst Ratings for TMUS
View the Latest Analyst Ratings

Posted-In: Analyst Color M&A News Price Target Politics Reiteration Analyst Ratings General Best of Benzinga

 

Related Articles (S + TMUS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
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.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Routeique is Newest Member of Blockchain in Transport Alliance

FMCSA Drug Testing Program in DOT Crosshairs