UPDATE: Leap Wireless (LEAP) Looking More Attractive as M&A Target, Macquarie Upgrades to Neutral

July 3, 2013 7:07 AM EDT
Get Alerts LEAP Hot Sheet
Price: $17.52 --0%

Rating Summary:
    4 Buy, 22 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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(Updated - July 3, 2013 7:37 AM EDT)

Macquarie upgraded Leap Wireless (NASDAQ: LEAP) from Underperform to Neutral with a price target of $7.50 (from $4.50). The upgrade relates to changes to Leaps debt maturities and increased likelihood of a takeout by T-Mobile US (NYSE: TMUS) or Dish Network Corp. (Nasdaq: DISH).

"TMUS's share price has appreciated from ~$15 to $24, making a stock deal for LEAP more palatable," said analyst Kevin Smithen. "LEAP stock is tightly-controlled by a few holders and this can be both a catalyst and an obstacle for a sale. We believe that a buyer would have to pay at least $10 to acquire LEAP, and perhaps higher."

"In the meantime, TMUS will be entering a lot of LEAP markets in the second half. This could put further pressure on LEAP's already eroding operating business. In our opinion, this could drive LEAP's Board and key holders to sell now,' added Smithen.

For an analyst ratings summary and ratings history on Leap Wireless (NASDAQ: LEAP) click here. For more ratings news on Leap Wireless click here.

Shares of Leap Wireless closed at $6.69 yesterday.

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