Hold Rating for T-Mobile US Amid Strong Financials and Competitive Challenges

In a report released today, Michael Rollins from Citi reiterated a Hold rating on T Mobile US (TMUS – Research Report), with a price target of $268.00.

Michael Rollins has given his Hold rating due to a combination of factors surrounding T-Mobile US’s recent performance and market conditions. The company reported solid financial results with an 8% year-over-year increase in Core EBITDA and a 5% growth in service revenue. However, the postpaid phone performance was mixed, with phone net additions aligning with expectations, but higher churn and slightly lower ARPU growth than anticipated.
Despite T-Mobile’s strong position to capture market share and sustain mid-single-digit organic revenue growth, increased industry competition may limit its ability to exceed expectations as it has in the past. Additionally, while T-Mobile is optimistic about its broadband sales and competitive strategy, the heightened competition and potential shifts in smartphone sales dynamics present challenges. These factors contribute to the Hold rating, as shares might face short-term pressure without stronger postpaid performance indicators.

In another report released today, Bernstein also maintained a Hold rating on the stock with a $265.00 price target.