T-Mobile US Analysts Cheer Its Preliminary Q4 Subscriber Numbers - T-Mobile US (NASDAQ:TMUS)

RBC Capital analyst Kutgun Maral maintained Outperform on T-Mobile US, Inc TMUS with a $166 price target after it shared preliminary 4Q22 subscriber results and provided some color at an investor conference.
Postpaid phone net adds of 927k matched sell-side consensus, though the analyst believes were encouragingly ahead of buy-side expectations in the mid-800k range or lower, given concerns over the impact of Apple Inc AAPL iPhone supply chain disruption.
Churn was again a bright spot and helped offset a 7.0% decline in gross adds, with the latter potentially suggesting a margin upside in the quarter.
High-speed internet net adds were a touch light (524k vs. consensus of 555k) and moderated slightly over the two prior quarters (560k/578k). While this level of growth remains problematic for Cable and telco operators, there is some relief from their perspective that T-Mobile’s trends have begun to stabilize or decline.
Lastly, on the 2023 financials, the analyst chose to wait for the 4Q22 results.
Benchmark analyst Matthew Harrigan reiterated a Buy with a $197 price target.
Postpaid phone net customer additions were 3.1M for the year and 927K for the final quarter, both the best in the industry and the highest since the Sprint merger.
Q4 postpaid phone churn was 0.92%, the best seasonal result ever, and the only operator showing Y/Y improvement with full-year 0.88% monthly churn similarly positioned as the Sprint albatross dwindles.
T-Mobile generated 524K high-speed customer additions and 2M for the full year 2022, more than its four largest fixed competitors combined, ending with a 2.6M base.
T-Mobile continues to behave as a relatively safe haven even within a sweepingly broad pan TMT perspective as T-Mobile’s ARPA and ARPU growth strategy relies on self-selection upselling to Magenta Max rather than pricing.
Benchmark believes T-Mobile has the network capacity to support a robust FWA alternative in most of its markets and certainly without jeopardizing higher ROI mobile capacity.
Unlike its cable MVNO peers, T-Mobile does not require Home Internet customers to be phone subscribers, although it did trial a bundled Q4 offer where new customers could sign up for just $25 monthly if they took one or more voice lines with some incremental phone pull through.
KeyBanc analyst Brandon Nispel reiterated Overweight with a $165 price target.
Nispel raised 2023 EBITDA estimates while reducing postpaid phone estimates on lower gross additions.
Preannounced net additions were mixed. The postpaid phone and prepaid gross additions declined Y/Y, and fixed wireless appears to have peaked (+ for Cable), though the stock should react positively.
However, the lower activity should result in better adjusted EBITDA guidance.
With the run in the stock in 2022, TMUS trades at a premium, which Nispel believes 2023 adjusted EBITDA guidance coming in above consensus is the critical factor.
Price Action: TMUS shares traded higher by 2.67% at $143.69 on the last check Thursday.
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