Global Courant
“Patience should be rewarded,” Morgan Stanley said of T-Mobile’s stock. The company has put T-Mobile back on its list of top picks in telecom services. Analyst Simon Flannery maintained his overweight rating for equities while raising his price target by $1 to $178. His target price implies a 39% gain from where the shares closed Thursday. “T-Mobile is one of the few companies in our coverage (along with Iridium) with a sizable buyback program that can take advantage of market volatility. The company offers investors low leverage, strong FCF generation, recurring revenue model, network leadership, growing market share and reasonable valuations,” Flannery wrote in a note Thursday. The analyst said the recent weakness in the telecom services sector creates an opportunity for T-Mobile to execute the remainder of its $14 billion share repurchase program at lower prices, “creating greater shareholder value.” Flannery noted that temporary headwinds from DISH and Verizon pulling away heavy traffic is temporary headwinds for T-Mobile stock. The company’s ability to outperform the industry may become more difficult as market share increases, he added. Shares are down more than 8% so far. The stock is still up 1.2% over the past 12 months. Morgan Stanley said it expects the stock to “break out of this range in the coming months, driven by operational and technical factors.” The company expects T-Mobile to continue to take a stake in the wireless industry, while its newly launched 5G plan will support service revenue growth. TMUS YTD mountain TMUS year to date — CNBC’s Michael Bloom contributed to this report.
