Morgan Joseph Downgrades Towerstream (TWER) to Sell; Prospects Diminished After Operator Merger Announced

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TWER Hot Sheet

Rating Summary:
3 Buy, 0 Hold, 1 Sell

Rating Trend:

Up

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

Morgan Joseph downgraded Towerstream (NASDAQ: TWER) from Hold to Sell. PT $3.

Morgan analyst says, "We are lowering our rating given our belief that the AT&T (NYSE: T) and T-Mobile merger announced yesterday diminishes the company's much-hyped offloading prospects. Last week, Towerstream announced its intention to build approximately 1,000 Wi-Fi access points by mid-year, and 1,500 by year-end in New York, which we believe was a possible solution to offloading congested operator networks, particularly for AT&T, which has struggled with its network as a result of iphone usage. However, with the announced acquisition of Deutsche Telekom's (NYSE: DT) subsidiary, T-Mobile USA, we believe AT&T's congestion problems may be lessened."

"We continue to estimate 2011 sales of $25.5mm, and an EPS loss of ($0.14), while for 2012, we continue to estimate sales of $33.5mm and EPS of $0.16."

For more ratings news on Towerstream click here and for the rating history of Towerstream click here.

Shares of Towerstream closed at $4.26 yesterday, with a 52 week range of $1.36-$5.09.

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