Recently, T-Mobile (TMUS) and Sprint (S) shares continued to sway. The merger’s future isn’t clear. Both of the stocks peaked to their respective 52-week highs late last month when the Department of Justice approved the long-awaited merger. Since then, T-Mobile stock has fallen 8%, while Sprint stock has fallen 15%. Democratic senators and state attorneys want to block the deal. To learn more, read T-Mobile and Sprint’s Deal in Peril despite FCC Chair’s OK.
What’s next for T-Mobile and Sprint?
So far, T-Mobile and Sprint stocks have risen about 20% and 16% this year. The deal’s uncertainty might continue to weigh on the stocks in the short term. The US Communications ETF (IYZ) has risen 6%, while the S&P 500 has risen 16% year-to-date.
Given T-Mobile’s chart indicators, its 50-day moving average level provided strong support. Breaching below the level of $77.0 could open up a new downside for the stock. Currently, T-Mobile stock is trading 8% above its 200-day moving average level. The company’s relative strength index was 49, which indicates that the stock isn’t in the overbought or the oversold zone.
Sprint stock is trading 3% below its 50-day and 7% above its 200-day moving average levels. The levels close to $6.4 might act as a support for the stock.
According to a latest 13F filing, most of the top institutional investors increased their stakes in T-Mobile stock. Among top buyers, Capital World Investors added a net 7.7 million shares during the second quarter. Capital World Investors held around 3% in the company as of June 30. Fidelity Management and Research Company added almost 3 million net shares in the second quarter. The company held 3.1% of T-Mobile’s total outstanding shares.
Fidelity Management and Research Company also bought big in Sprint last quarter. During the second quarter, Fidelity Management added more than 29 million Sprint shares. The institution held 0.74% in the wireless carrier.
Analysts seem to be positive on T-Mobile stock. Among the 21 analysts tracking T-Mobile, 11 recommended a “buy,” seven recommended a “strong buy,” and three recommended a “hold.” None of the analysts recommended a “sell” as of Wednesday.
Analysts have given T-Mobile a mean target price of $88.8 compared to its current market price of $77.7. The target price implies an estimated upside of 14.3% for the next 12 months.
Analysts are cautious about Sprint stock. Analysts have given the company a target price of $6.9. Sprint closed at $6.8 on Tuesday. The stock offers a flattish upside.