Credit Suisse Reduces 1Q Estimates On T-Mobile Due To Strategic Activity

In a report published Thursday, Credit Suisse analyst Joseph Mastrogiovanni reiterated an Outperform rating and $39.00 price target on T-Mobile US Inc. (NYSE: TMUS).

In the report, Credit Suisse noted, "T-Mobile announced its newest Un-carrier initiative, which provides attractive and simplified pricing for business customers. The bottom line is that Un-carrier 9.0 provides a significant opportunity for the company, but we believe business customers could be slow to switch, as these customers are typically more focused on network coverage/quality, and fully integrated solutions (wireless, wireline, cloud and/or security) than price. Separately, we're reducing our 1Q15 EBITDA estimate to $1.284B due to higher equipment and marketing costs than we were expecting. We're reducing our FY2015 EBITDA estimate by less than 1% to $6.995B, as we pull some costs forward to 1Q and expect a benefit from greater net adds than originally expected in 1Q15. Our FY2015 EPS is now $0.67 (from $0.73). T-Mobile remains our top pick. It trades below the group average on '16E EV/EBITDA (5.6x vs. 6.1x), despite better growth and the potential to be an acquisition target."

T-Mobile closed on Wednesday at $32.86.