- RBC Capital analyst Kutgun Maral maintained Outperform on T-Mobile US, Inc TMUS with a $166 price target after it shared preliminary 4Q22 subscriber results and provided some color at an investor conference.
- Postpaid phone net adds of 927k matched sell-side consensus, though the analyst believes were encouragingly ahead of buy-side expectations in the mid-800k range or lower, given concerns over the impact of Apple Inc AAPL iPhone supply chain disruption.
- Churn was again a bright spot and helped offset a 7.0% decline in gross adds, with the latter potentially suggesting a margin upside in the quarter.
- High-speed internet net adds were a touch light (524k vs. consensus of 555k) and moderated slightly over the two prior quarters (560k/578k). While this level of growth remains problematic for Cable and telco operators, there is some relief from their perspective that T-Mobile’s trends have begun to stabilize or decline.
- Lastly, on the 2023 financials, the analyst chose to wait for the 4Q22 results.
- Benchmark analyst Matthew Harrigan reiterated a Buy with a $197 price target.
- Postpaid phone net customer additions were 3.1M for the year and 927K for the final quarter, both the best in the industry and the highest since the Sprint merger.
- Q4 postpaid phone churn was 0.92%, the best seasonal result ever, and the only operator showing Y/Y improvement with full-year 0.88% monthly churn similarly positioned as the Sprint albatross dwindles.
- T-Mobile generated 524K high-speed customer additions and 2M for the full year 2022, more than its four largest fixed competitors combined, ending with a 2.6M base.
- T-Mobile continues to behave as a relatively safe haven even within a sweepingly broad pan TMT perspective as T-Mobile’s ARPA and ARPU growth strategy relies on self-selection upselling to Magenta Max rather than pricing.
- Benchmark believes T-Mobile has the network capacity to support a robust FWA alternative in most of its markets and certainly without jeopardizing higher ROI mobile capacity.
- Unlike its cable MVNO peers, T-Mobile does not require Home Internet customers to be phone subscribers, although it did trial a bundled Q4 offer where new customers could sign up for just $25 monthly if they took one or more voice lines with some incremental phone pull through.
- KeyBanc analyst Brandon Nispel reiterated Overweight with a $165 price target.
- Nispel raised 2023 EBITDA estimates while reducing postpaid phone estimates on lower gross additions.
- Preannounced net additions were mixed. The postpaid phone and prepaid gross additions declined Y/Y, and fixed wireless appears to have peaked (+ for Cable), though the stock should react positively.
- However, the lower activity should result in better adjusted EBITDA guidance.
- With the run in the stock in 2022, TMUS trades at a premium, which Nispel believes 2023 adjusted EBITDA guidance coming in above consensus is the critical factor.
- Price Action: TMUS shares traded higher by 2.67% at $143.69 on the last check Thursday.
- Photo Via Company
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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