Sprint Nextel (S) Jumps As Goldman Says Company Will Benefit From Lackluster Past

Shares of Sprint Nextel Corp. (NYSE: S) are jumping higher today after Goldman Sachs upgraded the stock to Buy and commented about how the wireless provider will now benefit from its past failures.

The Goldman analyst said the real battle for Sprint is and has always been churn, or client turnover. The firm notes that gross additions and upgrades in any given period form Sprint's churn pool two years later, as contracts end. Goldman argues that since Sprint's add/upgrade activity slowed sharply in 2008, "ironically" this will benefit the company this year as the churn pool is lower.

The firm sees three drivers that set up the 2nd-half favorably, "fewer subs coming up for grabs; Sprint has been doing a better job at retention; gross add share is picking up."

The firm raised their price target on Sprint from $3.50 to $6.00.

Shares of Sprint are up 8.8 percent to $4.80.

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