23 Oct

Sprint Expands Its 5G Network Coverage in Nine Cities

WRITTEN BY Ambrish Shah

On October 22, Sprint (S) announced that its True Mobile 5G service now covers 16 million people in nine cities:

  • Washington, DC
  • Atlanta
  • Dallas-Fort Worth
  • Chicago
  • Houston
  • Los Angeles
  • Kansas City
  • New York City
  • Phoenix

Earlier, the company offered 5G wireless service to 11 million people in nine cities. The initial results suggest that the wireless customers with 5G devices in those nine cities are witnessing a sixfold rise in average download speed compared to LTE.

Sprint 5G coverage

According to a FierceWireless report on October 22, “Sprint has a boat load of 2.5 GHz spectrum, and it’s using it to cover more areas than its larger, more profitable rivals that are relying initially on millimeter wave (mmWave) spectrum for 5G rollouts. The mid-band spectrum signals that Sprint controls cover a larger area.”

Sprint CTO John Saw thinks that the company would be in a better position if its merger with T-Mobile (TMUS) happens. The report added, “Together we’ll build a better, faster, nationwide mobile 5G network that unleashes this performance across the entire country to benefit all U.S. businesses and consumers.”

T-Mobile and Sprint merger

The proposed $26.5 billion merger between T-Mobile and Sprint is still pending. The merger agreement faces a lawsuit from about 15 states and the District of Columbia on antitrust issues. A court trial is set to start in December.

Earlier this month, Colorado and Mississippi decided to withdraw from the lawsuit that was filed to stop the combination. The two states now support the merger deal.

In July, the US Department of Justice approved the merger deal between third- and fourth-largest mobile operators in the US. According to CNBC, the Federal Communications Commission also blessed the merger deal. Read The T-Mobile-Sprint Merger: The End Is Near to learn more.

Analysts’ recommendations

Among the 18 analysts surveyed by Thomson Reuters who follow Sprint, 14 recommend a “hold,” and three recommend a “sell.” The remaining analyst recommends a “buy.”

Sprint’s overall rating score is 3.17, which is equivalent to a “hold.” The stock’s mean consensus 12-month price target of $6.65 represents a potential upside of 4.7% over its closing price on October 22. The consensus 12-month price target for Sprint is down from $6.68 in September, a fall of 0.4%.

Sprint’s competitors AT&T (T) and T-Mobile have average broker target prices of $36.50 and $88.95, respectively. These figures imply returns of -4.4% and 8.9%, respectively, over the next 12 months.

Stock performance

On October 22, Sprint stock fell 1.1% and closed at $6.35, with a market cap of $26.0 billion. The stock is trading 16.7% above its 52-week low of $5.44 on April 29. Also, Sprint stock is trading 21.2% below its 52-week high of $8.06 on July 26. For the last 14 days, Sprint’s RSI has stood at 47. This score suggests that the stock is neither overbought nor oversold.

Year-to-date, Sprint stock has risen 9.1% through October 22. During this period, AT&T and T-Mobile have risen 33.7% and 28.4%, respectively.

In the September quarter, Sprint is expected to report adjusted EPS of -$0.02 compared to $0.05 in the same quarter in 2018. Analysts also expect its revenue to fall 3.1% year-over-year to $8.2 billion.

Please read Barclays Lowers Sprint Target Price by 25% to learn more.

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