T-Mobile (TMUS) 'Continues to Execute Well' - BofA

BofA analyst David Barden reiterated a Buy rating and $175 price target on T-Mobile (NASDAQ: TMUS) shares in a note Monday.

In a note to clients, the analyst explained they are refreshing estimates ahead of third-quarter reporting to "reflect company commentary made during conferences and meetings heading into quarter end."

"TMUS continues to execute well against a clear plan," wrote Barden. "It is leveraging its 5G network lead to grow in 1) small markets and rural areas, 2) the Enterprise segment, 3) fixed wireless access, and 4) segments within the top 100 markets that prioritize network quality. This month the TMUS Board authorized the commencement of a share buyback program. The program targets $60bn+ by 2025E. The initial authorization is for $14bn ($3bn in 2022; $11bn in 2023). Softbank true-up shares are subject to a lock-up until DT hold a majority of TMUS."

BofA slightly lowered its postpaid phone net add estimate to 835k from 861k, based on slightly lower gross additions.

"We estimate churn at 0.86% which aligns with management comments that y/y improvements in 2Q churn would be similar in 3Q as it works through the final stages of the Sprint integration and seasonally higher
market activity. These changes lowered our service revenue estimate to $15.4bn from $15.5bn. Our core adjusted EBITDA is unchanged at $6.3bn in 3Q," added Barden.

By Sam Boughedda

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