Citi has updated its outlook on T-Mobile US (NASDAQ: NASDAQ:TMUS), increasing the price target to $254 from the previous $210, while reiterating a Buy rating on the stock.
The adjustment comes ahead of the company's third-quarter results, expected to showcase strong key performance indicators (KPIs) and financial outcomes.
The firm anticipates T-Mobile to report solid third-quarter results, including a core EBITDA that aligns with service revenue growth of 4.6% and postpaid phone net adds of 719,000, which may prove to be a conservative estimate.
The analyst's optimism is partly based on insights from T-Mobile's recent Capital Markets Day (CMD), which highlighted the company's operational strategies and growth potential.
According to the analyst's note, T-Mobile's earnings focus will likely be on the company's ability to continue gaining market share in under-penetrated segments and strategies for balancing volume with Average Revenue Per User (ARPU) to maintain consistent annual service revenue growth. The company's investment in the fiber-to-the-home (FTTH) business is expected to contribute positively to its long-term financials.
In other recent news, SpaceX and T-Mobile have received emergency temporary approval from the U.S. Federal Communications Commission (FCC) to provide direct-to-cell coverage via Starlink satellites in North Carolina, an area recently affected by Hurricane Helene.
The initiative aims to restore wireless and internet services and supports ongoing testing efforts. In financial news, Deutsche Bank has raised its price target for Deutsche Telekom (OTC:DTEGY) to €33.00, reflecting a positive view on the company's year-to-date total shareholder return of 26%.
In an agreement with the FCC, T-Mobile US Inc has settled to pay $31.5 million following significant data breaches over the past three years. The settlement includes a civil penalty and an investment in enhancing the company's cybersecurity measures. Meanwhile, BofA Securities has maintained its Buy rating and $220.00 stock price target for T-Mobile US, citing the company's strong growth outlook.
RBC Capital has also adjusted its outlook on T-Mobile US, raising the stock's price target to $232 from the previous $200, ahead of the company's third-quarter 2024 earnings report.
InvestingPro Insights
T-Mobile US (NASDAQ:TMUS) continues to demonstrate strong market performance, aligning with Citi's optimistic outlook. According to InvestingPro data, the company's market capitalization stands at an impressive $260.57 billion, reflecting its significant presence in the wireless telecommunication services industry.
T-Mobile's financial metrics support the positive sentiment expressed in the article. The company's revenue for the last twelve months as of Q2 2024 reached $79.1 billion, with a healthy gross profit margin of 63.6%. This robust financial performance is further underscored by an adjusted operating income of $16.82 billion for the same period.
InvestingPro Tips highlight T-Mobile's strengths, noting that it has a perfect Piotroski Score of 9, indicating strong financial health. Additionally, the stock is trading at a low P/E ratio relative to near-term earnings growth, which could be attractive for value-oriented investors. These insights complement the article's focus on T-Mobile's growth potential and operational strategies.
It's worth noting that T-Mobile's stock has shown remarkable performance, with a one-year price total return of 65.47% as of the latest data. This aligns with the article's discussion of the company's market share gains and potential for sustained growth.
For readers interested in a more comprehensive analysis, InvestingPro offers 14 additional tips for T-Mobile US, providing a deeper understanding of the company's financial position and market outlook.
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