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Wall Street’s Take on T-Mobile: Mostly ‘Buy’

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Wall Street’s view of T-Mobile

In the previous part of this series, we looked at the scale of T-Mobile (TMUS) among the top four mobile companies in the United States. These four players include AT&T (T), Verizon (VZ), T-Mobile (TMUS), and Sprint (S).

We also saw that T-Mobile’s forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple was higher than Sprint’s but lower than Verizon’s and AT&T’s as of June 28, 2016.

Now let’s look at some market-centric views and metrics for T-Mobile.

As you can see in the above graph, out of 30 recommendations, a predominant ~70% of analysts recommended a “buy” for T-Mobile stock as of June 28, 2016. About 26.7% of analysts recommended a “hold,” and ~3.3% recommended a “sell.”

The average analyst target price for T-Mobile stock was $45.96 as of June 28, 2016. It’s worth noting that T-Mobile’s closing price was $42.51 on that day.

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T-Mobile’s stock price performance

As of June 28, 2016, the price decline for T-Mobile during the past month was a marginal ~0.1%. However, taking the previous three-month period into consideration, the price of T-Mobile stock rose ~10.6%.

For a diversified exposure to some telecom players in the United States, you can consider investing in the SPDR S&P 500 ETF (SPY). The ETF had a total of ~2.7% in AT&T, Verizon, CenturyLink (CTL), Level 3 Communications (LVLT), and Frontier Communications (FTR) at the end of May 2016.

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