T-Mobile US' Lower Churn Likely To Drive Future Performance: Analyst

  • Citi analyst Michael Rollins reiterated a Buy rating on T-Mobile US, Inc TMUS and raised the price target from $172 to $174.
  • The analyst updated his outlook for T-Mobile following the pre-released 4Q KPIs during Citi’s 2023 CME Conference. 
  • The more significant reduction in 4Q churn could be a prelude to better churn rates in the future. 
  • Rollins believes the completed network integration and ongoing reduction of leased devices can lead to further improvements in churn during 2023 over 2022. 
  • A lower churn outcome can help improve annual postpaid phone growth, reduce acquisition costs (and improve EBITDA), or combine these potential benefits. 
  • The analyst believes T-Mobile can sustain favorable revenue growth (relative to the industry) in 2023 while improving margins and repurchasing a significant percentage of its shares. 
  • Rollins remains a buyer of T-Mobile as a top-ranked pick, incorporating some moderation rates and an updated multi-year financial outlook. 
  • Price Action: TMUS shares traded lower by 0.10% at $145.00 on the last check Friday.
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