T-Mobile: From Turnaround Story To Industry Powerhouse

Everyone loves a turnaround story, and corporate America can turn to T-Mobile US Inc TMUS for a perfect example, at least according to Joseph Bonner of Argus Research, as the company evolved from a "turnaround story to an industry powerhouse."

In a research report published Wednesday, Bonner maintained a Buy rating on T-Mobile's stock with a price target boosted to $56 from a previous $49. The analyst stated that T-Mobile's CEO John Legere continues to "challenge" the wireless sector with "innovative" service plans, offering customers incremental benefits and perks rather than competing on price.

T-Mobile has also overseen a "razzle-dazzle" marketing campaign that has made the other major wireless carriers "running scared."

Related Link: Limited Headwinds For T-Mobile Seen At Barclays, Price Target Raised

"The success of these service plan innovations has been evident as competitors seek to copy various plan features," the analyst said. "Meanwhile, T-Mobile continues to gain traction with subscribers and is taking market share from all three of the other major wireless carriers. There is no question that TMO has momentum in the marketplace, as competitors respond to its continuing promotions or diversify away from the U.S. wireless market altogether."

With that said, Bonner stated that T-Mobile's stock is still "attractively valued" at current levels, which was made clear after the company reported its second-quarter results, showing a 13 percent year-over-year gain in revenue and a 36 percent increase in its EBITDA.

Bonner is also raising his full-year fiscal 2016 earnings estimate by a penny to $1.27 and keeping his 2017 estimate of $1.78 per share unchanged.

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