J.P. Morgan Keeps Rating, PT On S As Company Looks Ahead

J.P. Morgan is maintaining its Overweight rating and its $7 price target on Sprint Nextel S as the company prepares to undertake a large technology update in the near future. In the report, J.P. Morgan writes, “Sprint plans to undertake a modernization effort over the next 3-4 years called Network Vision (NV). We believe this will include 10+ MHz of LTE on Sprint's PCS spectrum, but it will ultimately need additional 4G capacity and must decide if it wants to re-commit to Clearwire or continue to play the field, such as pursuing the LightSquared (L2) option. With LightSquared facing GPS interference and issues, we think Sprint could increasingly focus on retaining Clearwire as a long-term wholesale option. In our view, Sprint's primary 4G option will be to run LTE on its own spectrum but utilize Clearwire and potentially LightSquared for incremental capacity.” S closed yesterday at $5.24.