A Price Target Update for Sprint

Of the 22 Reuters-surveyed analysts covering Sprint (S) stock on December 27, only 14% rated it as a “buy,” while 23% rated it as a “sell,” and 63% rated it as a “hold.” 

Based on the stock’s December 27 price of $5.85, analysts’ consensus target price of $5.78 implies that they expect it to fall ~1.2% over the next 12 months. Its target price has risen from $5.73 a month ago.

On December 27, Sprint’s market cap was $23.9 billion, making it the fourth-largest US mobile carrier in terms of market cap. In comparison, T-Mobile (TMUS) had a market cap of $53.2 billion, Verizon’s (VZ) market cap was $227.9 billion, and AT&T’s (T) market cap was $204.9 billion.

On December 27, Sprint had a trailing-12-month EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~4.60x compared to the multiples of its closest peers. T-Mobile, AT&T, and Verizon had trailing-12-month EV-to-EBITDA multiples of ~7.23x, ~7.15x, and ~7.27x, respectively.

Sprint expects its EV-to-EBITDA in fiscal 2018 (which ends on March 2019) to be ~4.36x, while in fiscal 2019, it expects this multiple to be ~4.21x.