Analyst Credits T-Mobile's 5G Progress for Gaining Traction in Corporate Markets, Stock Re-Rated

  • Benchmark analyst reiterated a Buy rating on T-Mobile US, Inc TMUS with a price target of $197.00.
  • The T-Mobile stock continues to behave as a relative haven of continuing operational momentum and nascent buyback activity, the analyst highlights in a Tuesday note titled "T-Mobile Continues to Play Ball in Difficult Economy."
  • The mobile network operator continues progressing rapidly with its 5G capabilities, as conveyed at the 2023 Mobile World Congress, and more effective marketing, including last week's announcement of a partnership with Major League Baseball to create more 5G experiences for fans. (This includes testing this season of an Automated Ball-Strike (ABS) system). 
  • T-Mobile's ARPA and ARPU growth strategy relies on self-selection upselling to Magenta Max rather than naked pricing. 
  • T-Mobile is generating momentum in underpenetrated smaller markets and with corporate customers even as urban market customers become more mindful of the company's 5G network leadership. 
  • TMUS's mega-cap status provides some insulation to the softening consumer and macro headwinds further exacerbated by the SVB black swan event.
  • Working with Ericsson ERICNokia Corp NOKQualcomm Inc QCOM, and Samsung Electronics Co, Ltd SSNLF, T-Mobile completed the first four-carrier aggregation 5G data call on a commercial device. 
  • Combining four channels of mid-band spectrum enabled a 5G pipe delivering peak speeds north of 3.3 Gbps. T-Mobile is now working with vendors on six and soon seven-layer carrier aggregation. 
  • The analyst expects 2.3% service revenue growth to $15.5 billion, with the overall top line, including equipment and leasing, off nearly 2% to $19.8 billion for the March quarter. 
  • Core EBITDA will likely increase by 7.0% to $6.9 billion. He anticipates 1.085 million postpaid net customer additions en route to 2023 full-year additions of 5.38 million within 5.0 million-5.5 million guidance.
  • Price Action: TMUS shares traded higher by 0.01% at $150.01 on the last check Tuesday.
  • Photo via Wikimedia Commons
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