Leap (LEAP) Shares Surge as Analyst Adds to 'Short-Term Buy' List

Shares of Leap Wireless (Nasdaq: LEAP) are up more than 11 percent Monday afternoon as analysts at Deutsche Bank added the stock to the firm's "Short-Term Buy" list earlier.

The call follows channel checks through Black Friday which suggest prepaid competition remains fierce but seems encouraging for Leap. The firm cites "new plans/promos and renewed efforts by the national carriers."

Deutsche Bank is now expecting Leap to report fourth-quarter net voice additions of 225,000, up from an estimate of 175,000 previously. Total net adds (including broadband losses) move from 125,000 to 175,000. The firm cautioned that its net adds estimate may be conservative given the forecast only "assumes new national retail channels are only 1/10th as productive as established stores."

Deutsche Bank believes the two key drivers are: "the addition of new national retail channels..." and "encouraging 4Q checks through Black Friday, which found strong momentum for LEAP's high-ARPU Muve music service, especially in branded stores."

The firm maintains a Hold rating and $13 price target on shares of Leap Wireless.

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