T-Mobile Is Credit Suisse's Telecom Pick For 2015

In a recent report, analysts at Credit Suisse outlined their 2015 outlook for telecom stocks. Analysts picked T-Mobile US Inc TMUS as their top pick in the sector.

Buyout Target

Analysts believe that T-Mobile is the best acquisition target during potential consolidation in the space. After the recent AT&T Inc. T buyout of DIRECTV DTV, competitors such as Verizon Communications Inc. VZ could feel pressure to consider acquiring T-Mobile.

Even if a potential buyout is blocked due to antitrust concerns, Credit Suisse analysts believe that T-Mobile could be the beneficiary of a significant breakup fee.

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Potential Upside

Regardless of buyout activity, analysts see improving fundamentals for T-Mobile and the potential for the company to gain market share from competitors. "We believe that T-Mobile’s attractive pricing and improved network will have a sustained positive impact on postpaid subscriber growth."

Credit Suisse has an Outperform rating on T-Mobile and has set a $39.00 price target for the stock. The $39.00 price target represents a 33 percent upside for the stock from current levels. T-Mobile stock has fallen 11.4 percent over the past year. It closed Monday at $29.27.

Other Analyst Action

Back in September 2014, analysts at Argus upgraded T-Mobile stock from Hold to Buy and set a $40 price target. In May, Hudson Square Research reiterated their Buy rating and raised their price target from $33 to $40.

Upcoming Earnings

The next potential catalyst for T-Mobile could be its Q4 2014 earnings report expected to be released on February 19. Analysts are forecasting earnings per share of $0.01.