T-Mobile US (TMUS) Has Best Fundamentals in US Telecom, Macquarie Says; PT to $36 Post Q4

Macquarie analyst Kevin Smithen reiterating an Outperform rating and boosted his price target on T-Mobile US, (NYSE: TMUS) to $36.00 (from $33.00) following earnings, saying has the best fundamentals in US Telecom.

Smithen commented, "What T-Mo mgmt. accomplished during the fiercely competitive Dec qtr. in terms of 30% rising seq. EBITDA while adding 1.3m postpaid subs is nothing short of stellar, in our view. With market and telco multiples having recovered in recent weeks and post-auction/Title II noise and T-Mo having better sub and EBITDA momentum than any stock we cover incl. towers and fiber, we can make the case that T-Mo deserves a 6.5x multiple on 2016E EBITDA or greater. This compares to T and VZ at 6.5x and 7.3x ’16E EV/EBITDA for 6.3% and 1.7% ’15E EBITDA growth, respectively, and LVLT at 9.4x for 33.4% EBITDA growth this year. Our new TP of $36 is based on 6.3x (incl. NOLs and $1.5bln of incremental ’15 spectrum costs) and we believe that further multiple expansion is possible once postpaid ARPU begins to grow, which we expect in the Q2/Q3 timeframe."

For an analyst ratings summary and ratings history on T-Mobile US, click here. For more ratings news on T-Mobile US, click here.

Shares of T-Mobile US, closed at $31.00 yesterday.

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