Deutsche Bank Upgrades PT On Leap Wireless To $18, Maintains Hold (LEAP)

Deutsche Bank upgraded its price target on Leap Wireless LEAP from $14 to $18. In a research report published today, Deutsche Bank named strong Q1 results as a reason for the price target upgrade. It also stressed the presence of some risks for Leap, prompting it to leave its rating at Hold. In the report, Deutsche Bank state, "We are raising our 12-month price target on Leap Wireless (LEAP) to $18 from $14 following the 1Q11 beat. LEAP executed well by driving growth mainly through smartphone adoption while containing opex. Despite upcoming seasonal net add softness in 2Q and 3Q, we expect the benefits of rising ARPU to translate into EBITDA margin expansion from 17% in 1Q11 to 22% in 4Q11. We reiterate our HOLD on execution risks associated with LEAP's various initiatives including the rollout of its offering on a national basis as a network reseller." In yesterday's trading, Leap's shares skyrocketed to $16.54, an increase of 9.75% on the previous day's value.