T-Mobile Proves It Can Continue To Take Market Share, Best Play For Wireless Consolidation

T-Mobile US Inc's TMUS fourth quarter earnings report prompted Simon Flannery of Morgan Stanley to maintain a bullish stance on the mobile carrier.

In a report Wednesday, Flannery maintained an Overweight rating and $72 price target on T-Mobile's stock based on the view that the company can continue winning market share from its peers - even at a time of heightened competition. In fact, the analyst believes T-Mobile will lead industry subscriber growth in 2017 for the fourth consecutive year.

Flannery noted T-Mobile remains in position to take market share as a standalone company, although it can see further upside if strategic activity takes place in the wireless industry - as has been suggested and debated by Wall Street analysts.

Related Link: T-Mobile: From Turnaround Story To Industry Powerhouse

Flannery also noted T-Mobile's MVNO (mobile virtual network operators) are prioritizing higher average revenue per user in 2017, which could be a headwind in whole sale net adds although the company is still expected to see strong revenue growth. With that said, the analyst still believes T-Mobile's 2017 postpaid net adds will fall in the high end of its guidance of 2.4 million to 3.4 million.

Bottom line, T-Mobile's approximate 14 percent market share of postpaid subscribers has room to grow further, but the analyst's $72 price target is based on the "increasingly likely" scenario of strategic activity occurring.