T-Mobile Expansion In Untapped Markets Likely To Generate 'Significant' Cash Flow, Analyst Says

The continued deployment of low-band spectrum combined with the continuing expansion of retail stores will increase T-Mobile US Inc. TMUS’s market presence and pave the way for strong revenue generation, according to Raymond James.

The Analyst

Ric Prentiss of Raymond James upgraded T-Mobile from Market Outperform to Strong Buy and reiterated a $76 price target.

The Thesis

T-Mobile undertook heavy expansion efforts in 2017, opening 1,500 T-Mobile-branded stores and 1,300 MetroPCS-branded stores, Prentiss said in a Friday note. (See the analyst’s track record here.)

Many of the stores were in legacy markets, and the company is now continuing expansion efforts into "greenfield" markets, indicating a growing retail presence, Prentiss said. This expansion into new markets is likely to result in significant cash flow generation, he said.