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Raymond James analysts downgraded T-Mobile US (TMUS, Financials) to “Market Perform” from “Outperform” following the company’s third-quarter earnings report.
Along with a stronger full-year projection as T-Mobile expects more users, T-Mobile revealed above-expected third-quarter earnings earlier this week. But the research company voiced worries after seeing that the stock had already climbed 13% since the previous rating drop earlier this month, above its $221 year-end objective.
Raymond James stated that T-Mobile’s performance has been robust since the Sprint acquisition, hence enhancing market positioning and widening margins. The research note also mentioned vulnerabilities at the business, sector, and macro levels. Raymond James finds it difficult, nevertheless, to rationalize a greater price than during times of quicker expansion when T-Mobile maintained a higher premium than rivals.
The analysts also noted T-Mobile’s revised financial projections, which included a $50 million cost increase brought on by the Affordable Connectivity Program and a $137 million non-cash spectrum gain offsetting gross effects from recent disasters. The report also cited the company’s slower-than-expected share buybacks, which would point to a stock that has risen much too rapidly.
This article first appeared on GuruFocus.