Kaufman Bros. Downgrades Sprint (S) to Hold; Newest Strategy Misses the Mark, Puts Balance Sheet at Risk

Kaufman Bros. downgraded Sprint (NYSE: S) from Buy to Hold, price target lowered from $6 to $2.50.

Kaufman analyst says, "Sprint's completion of its upgrade is now expected to take closer to 2 1/2 years rather than the previous three-to-five year time frame while also becoming more aggressive with an LTE deployment. The targeted completion date for Network Vision is now the end of 2013. The roll out was expected to add an incremental $4 billion to $5 billion in expenses with just over 50% allocated to capital spending, and the remaining to operating expenses. With incremental spending for iPhone subsidies, more rapid deployment of Network Vision, and LTE, the pressures on the company's cash balance could be severe. Sprint now expects to cover 176 million PoPs with LTE by year end 2012, overlapping Clearwire with 67 million of those PoPs, and reaching 277 million PoPs by the end of 2013 (completely overlapping Clearwire (Nasdaq: CLWR). This is not necessarily a strategy we view as prudent for shareholders."

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

Shares of Sprint closed at $2.41 yesterday.

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