Barclays Maintains an 'Equalweight' on Sprint (S); New CLWR Deal Lowers Risks to Sprint at Modest Cost
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Price: $21.32 -5.2%
Rating Summary:
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Rating Summary:
23 Buy, 14 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 9 | New: 24
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Barclays maintains an 'Equalweight' on Sprint (NYSE: S) price target of $4.00.
Barclays analyst says, "We believe the new S/CLWR deal significantly reduces risks to Sprint's 4G customer base at a reasonable cost to Sprint. We have viewed Sprint's near/medium-term dependence on the Clearwire (Nasdaq: CLWR) network for the 9-10MM WiMax devices on the S network
as a key risk for Sprint. Without a deal, we viewed a CLWR bankruptcy filing as a potential risk, which would have presented a range of potential risks to Sprint, ranging from more negative roaming terms to (in a worst-case scenario) a CLWR network shutdown."
"While we don't believe a S/CLWR LTE partnership necessarily makes sense for S in the long term, given S's own LTE plans and the incremental cost of devices that could support both FDD (Sprint) and TDD (CLWR) LTE, the deal's commitments to that path are modest ($350MM). While the CLWR deal and Sprint's recent financing go a long way to reducing two of the key near-term Sprint risks, the company still faces significant execution risk related to Network Vision and the implications of the iPhone (Nasdaq: AAPL) launch, and business upside remains a multi-year proposition."
For an analyst ratings summary and ratings history on Sprint click here. For more ratings news on Sprint click here.
Shares of Sprint closed at $2.70 yesterday.
Barclays analyst says, "We believe the new S/CLWR deal significantly reduces risks to Sprint's 4G customer base at a reasonable cost to Sprint. We have viewed Sprint's near/medium-term dependence on the Clearwire (Nasdaq: CLWR) network for the 9-10MM WiMax devices on the S network
as a key risk for Sprint. Without a deal, we viewed a CLWR bankruptcy filing as a potential risk, which would have presented a range of potential risks to Sprint, ranging from more negative roaming terms to (in a worst-case scenario) a CLWR network shutdown."
"While we don't believe a S/CLWR LTE partnership necessarily makes sense for S in the long term, given S's own LTE plans and the incremental cost of devices that could support both FDD (Sprint) and TDD (CLWR) LTE, the deal's commitments to that path are modest ($350MM). While the CLWR deal and Sprint's recent financing go a long way to reducing two of the key near-term Sprint risks, the company still faces significant execution risk related to Network Vision and the implications of the iPhone (Nasdaq: AAPL) launch, and business upside remains a multi-year proposition."
For an analyst ratings summary and ratings history on Sprint click here. For more ratings news on Sprint click here.
Shares of Sprint closed at $2.70 yesterday.
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