Telecom Analysts Expect T-Mobile To Lead The Pack

Wells Fargo analyst Eric Luebchow recommends staying long with T-Mobile US, Inc TMUS (Overweight; Price Target $160) into Q3'22 earnings as the only carrier he confidently feels can meaningfully grow subscribers and EBITDA.
He sees an upside to both consensus mobile and FWA subs in Q3 for TMUS, while a $3 billion buyback in Q4 should provide some support in choppy markets.
He maintains a cautious stance on Verizon Communications Inc VZ (Equal-Weight; Price Target Reduced To $40 from $48), as weak subscriber results will likely make its aspirational long-term guide of +3% revenue growth challenging to achieve.
He is incrementally optimistic about AT&T Inc's T (Equal-Weight, Price Target Down To $17 From $22) subscriber outlook based on a solid Q3 but still questioned the company's EBITDA and FCF outlook for 2023, which likely needs to come down from company guidance.
He had also incorporated some recent findings from Roger Entner of Recon Analytics, with whom he hosted a call on October 6.
Truist analyst Greg P. Miller said as he approached the 3Q22 EPS season with continued intense competition combined with a slowing economic environment, he slightly lowered estimates for most carriers. But he continues to recommend TMUS and VZ as one gain share as the other positions itself for sustained growth with the industry-leading network.
With continued coverage expansion, corporate penetration, and strong FWA results, he expects TMUS to lead the pack even if difficult comps challenge relative performance with the S&P.
He reiterated a Buy on TMUS with a $175 price target.
He remains constructive with the solid growth outlook of the name, given its better 5G network coverage, speed performance, and industry-leading subscriber metrics.
Miller reiterated a Buy on VZ with a $58 price target.
He continues to expect VZ to witness phone losses in 3Q despite changes in plans designed to attract new users that bring their devices.
Miller reiterated a Hold on AT&T with a $21 price target.
The carrier has witnessed accelerated subscriber growth over the past few quarters. However, as he began to feel the impact of a slowing economy, he modestly adjusted estimates for AT&T.
Price Action: TMUS shares traded lower by 1.09% at $137.90 on the last check Friday.

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