On Monday, Citi reaffirmed its Buy rating on T-Mobile US (NASDAQ:TMUS) stock, maintaining a price target of $254.00. The firm's analysis anticipates T-Mobile to continue its robust service revenue growth at approximately 4.5% in the fourth quarter of 2024, with core EBITDA expected to grow by 10%.
This growth is projected to slightly surpass the consensus. The company's current EBITDA stands at $30.66 billion, with InvestingPro data showing five analysts recently revising their earnings expectations upward.
The forecast for postpaid phone net additions remains steady at 858,000, aligning closely with the consensus estimate of 860,000. This figure supports the full-year 2024 prediction of 3.03 million postpaid phone additions, consistent with T-Mobile management's statements during a recent investor conference.
The company's strong operational performance is reflected in its impressive 46.8% year-to-date return, with the stock currently trading near its 52-week high of $248.15.
Citi has updated its projections to reflect a flat year-over-year outlook for free cash flow (FCF) in the calendar year 2025, attributing this to a larger use of working capital and the anticipation of an increase in cash taxes.
Additionally, adjustments have been made in light of T-Mobile's initial free cash flow target of $14 billion for the fiscal year 2025, which includes a significant amount of non-organic investments.
For deeper insights into T-Mobile's financial health and valuation metrics, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company's financial position and growth prospects.
Despite these adjustments, Citi continues to recommend T-Mobile shares as a Buy. However, the firm notes that T-Mobile's elevated valuation compared to its competitors may cap the potential for stock price appreciation over the next 12 months.
According to InvestingPro's Fair Value analysis, the stock appears to be trading slightly above its Fair Value, with analyst price targets ranging from $184.95 to $280.00.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.