Goldman Sachs Cuts Price Target on Sprint (S), Capital Raise Issue an Overhang

Earlier, Goldman Sachs lowered its price target on Sprint (NYSE: S) from $4.50 to $3.00 while reiterating a Neutral rating.

Commenting on a key investor worry surrounding liquidity, the firm estimates that Sprint will burn $2.4 billion in 2012 and another $0.5 billion in 2013, in addition to debt maturities of $2.3 billion/$1.8 billion. This represents total cash requirements of $6.9 billion over this time frame. The firm notes that Sprint has $4.3 billion in cash, $0.9 billion in revolver capacity, and they could refinance maturing debt but at higher rate. This leaves a hole of $1.5 billion+ in debt that has to be raised. "We believe the company will look to raise $2-3bn in secured debt shortly after 3Q earning," Goldman's analyst said.

The firm cut FY11 EPS from ($0.83) to ($0.93) and FY12 from ($0.31) to ($0.51).

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

Shares of Sprint closed at $2.81 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• SentinelOne Inc (S) PT Raised to $27 at Oppenheimer
• SentinelOne (S) Reiterated at Market Outperform by Citizens Amid Customer Traction
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy