Scotiabank (TSX:BNS) has adjusted its price target for T-Mobile US (NASDAQ: NASDAQ:TMUS), increasing it marginally from $236.00 to $237.00. The firm maintained its "Sector Perform" rating on the stock.
The adjustment follows T-Mobile's announcement of a robust quarter, marked by leading subscriber growth and a keen focus on operating costs.
These factors contributed to a slight outperformance in EBITDA and prompted the company to raise its guidance.
T-Mobile's stock buyback pace slowed in the third quarter, with the company repurchasing $644 million worth of shares compared to $2.3 billion in the second quarter.
However, T-Mobile has intensified its buyback activities in the fourth quarter by adjusting its parameters, which has significantly supported its share price.
Scotiabank's analysis recognizes T-Mobile's strong position to continue its leading growth rates in subscriber numbers and cash generation. The firm identifies additional growth opportunities for T-Mobile in various market segments, including suburban, rural, and enterprise sectors in mobile, as well as potential market share increases in broadband.
In other recent news, T-Mobile US has been the focus of multiple positive adjustments by analysts following robust third-quarter 2024 results. Benchmark raised the price target for T-Mobile to $255, up from $250, maintaining a Buy rating. This adjustment was in response to T-Mobile's strong performance, including positive guidance revisions and evident operational momentum.
TD (TSX:TD) Cowen also increased the mobile carrier's price target to $250 from $216, sustaining a Buy rating. This upgrade was prompted by T-Mobile's exceeding expectations on key financial metrics, including EBITDA, revenue, and free cash flow.
BofA Securities, in turn, raised its price target for T-Mobile to $240 from $220, maintaining a Buy rating. This followed T-Mobile's third-quarter performance, which surpassed Wall Street's expectations on several key financial metrics.
In its third-quarter earnings call, T-Mobile announced record-breaking Q3 postpaid phone net additions and a record low churn rate. The company also raised its full-year guidance for 2024, reflecting confidence in its growth strategy.
InvestingPro Insights
T-Mobile US (NASDAQ:TMUS) continues to demonstrate strong market performance, aligning with Scotiabank's positive outlook. InvestingPro data shows that T-Mobile's market capitalization stands at an impressive $257.8 billion, reflecting its significant presence in the wireless telecommunication services industry.
The company's financial health is further underscored by its revenue of $79.1 billion over the last twelve months as of Q2 2024, with a gross profit margin of 63.6%. This robust financial performance supports Scotiabank's observation of T-Mobile's leading growth rates and cash generation capabilities.
InvestingPro Tips highlight T-Mobile's strength, noting that it has a perfect Piotroski Score of 9, indicating strong financial health. Additionally, the stock is trading at a low P/E ratio relative to near-term earnings growth, which could be attractive for value investors despite Scotiabank's caution on valuation.
It's worth noting that T-Mobile's stock has shown a strong return over the last three months, with InvestingPro data reporting a 25.32% price total return. This aligns with the expectation of an uptick in trading following the earnings beat and updated guidance.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for T-Mobile US, providing a deeper insight into the company's financial health and market position.
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