T-Mobile’s Premium Valuation Prompts Downgrade As Growth Projections Decelerate: Analyst
Keybanc analyst Brandon Nispel downgraded T-Mobile US Inc (NASDAQ:TMUS) from Overweight to Sector Weight.
The rerating reflects the valuation, which Nispel noted as stretched, and was unwilling to raise his price target to justify the valuation.
The analyst noted a lot to like in the business that has proven to be the market share leader in Wireless for nearly the past decade, and its FWA business has proven to be accretive.
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However, going forward, the competitive environment seems to be shifting toward a converged offering, with T-Mobile making acquisitions in the Fiber business at significant multiples that have yet to be proven.
In addition, with T-Mobile guiding to ~5% EBITDA growth in fiscal 2025, this is still a significant deceleration from ~9% in fiscal 2024 and compares to AT&T Inc’s Mobility business adjusted EBITDA guidance of 3%- 4%.
T-Mobile is …
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