T-Mobile US' Pricing Power Of 5G Is A Pivot Point, Analyst Says

Benchmark analyst Matthew Harrigan reiterated a Buy on T-Mobile US, Inc TMUS and cut the price target to $197 from $205.
The re-rating reflects pushing realization into 2023 even as TMUS continues to behave as a relatively safe haven even within a broad pan TMT perspective.
The mild PT tweak is entirely attributable to revised market valuation parameters under his now 17x normalized Shiller P/E approach, implying the S&P 500 may drift around current levels, assuming a recessionary $215 in 2023 earnings.
The weak economy augments TMUS’s value orientation appeal even as active switching is up YoY.
T-Mobile’s ARPA and ARPU growth strategy relies on “self-selection” upselling to Magenta Max rather than naked price hikes.
There is particular momentum for high-end handsets, especially Apple Inc AAPL iPhone 14, as Magenta MAX resonates with consumers.
Cost inflation, a significant overall market concern, is controlled by having significant costs locked into long-term contracts.
Furthermore, Mobile’s business plan does not include upside from mobile edge computing, private networks, and IoT off its 5G advantages.
TMUS’ pricing power of 5G and consumer and business customer perception is a pivot point for TMUS stock price upside.
Given TMUS’s moderate valuation relative to growth and business momentum, board approval for up to $14 billion in stock repurchases makes sense.
Price Action: TMUS shares traded higher by 1.11% at $135.33 on the last check Tuesday.