Kaufman Bros. Cuts Price Target on MetroPCS (PCS) as Net Adds and EBITDA Both Miss Expectations
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Price: $49.84 --0%
Rating Summary:
12 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 9
Rating Summary:
12 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 9
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Kaufman Bros. is reiterating its Buy rating on shares of MetroPCS (NYSE: PCS), but is cutting its price target by 33 percent to $16 following the company's Q3 results.
The company released its Q3 results bellow expectations with only 69K new adds and adjusted EBITDA of $327 million. Service revenue just missed expectations at $1.13 billion. The firm was forecasting $1.14 billion in revenue on 185K net adds and adjusted EBITDA of $371 million.
To go inline with the company's performance and market trends, Kaufman reduced its 2011 and 2012 EBITDA estimates from $1.4 billion and $1.7 billion to $1.3 billion and $1.5 billion.
An analyst at Kaufman comments, "We did not expect a notably better situation in Q3 results over Q2, but results missed both our net addition and EBITDA forecast for the quarter on higher churn and increased promotional activity... Competitors have become more aggressive recently in their prepaid offerings, but we believe competitor maneuvers will be short term in nature. We expect a seasonal decline in churn during 4Q11 and little impact on ARPU. Promotional activity will likely remain elevated until mid-2012 when handsets ASPs are expected to decline for LTE."
For more ratings news on MetroPCS click here and for the rating history of MetroPCS click here.
Shares of MetroPCS closed at $7.66 yesterday.
The company released its Q3 results bellow expectations with only 69K new adds and adjusted EBITDA of $327 million. Service revenue just missed expectations at $1.13 billion. The firm was forecasting $1.14 billion in revenue on 185K net adds and adjusted EBITDA of $371 million.
To go inline with the company's performance and market trends, Kaufman reduced its 2011 and 2012 EBITDA estimates from $1.4 billion and $1.7 billion to $1.3 billion and $1.5 billion.
An analyst at Kaufman comments, "We did not expect a notably better situation in Q3 results over Q2, but results missed both our net addition and EBITDA forecast for the quarter on higher churn and increased promotional activity... Competitors have become more aggressive recently in their prepaid offerings, but we believe competitor maneuvers will be short term in nature. We expect a seasonal decline in churn during 4Q11 and little impact on ARPU. Promotional activity will likely remain elevated until mid-2012 when handsets ASPs are expected to decline for LTE."
For more ratings news on MetroPCS click here and for the rating history of MetroPCS click here.
Shares of MetroPCS closed at $7.66 yesterday.
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