Nomura Securities Maintains a 'Neutral' on Sprint (S); PCS Deal Just Added Risk to List of Challenges
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Price: $21.82 -5.58%
Rating Summary:
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Rating Summary:
23 Buy, 14 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Nomura Securities maintains a 'Neutral' on Sprint (NYSE: S) price target of $2.50.
Analyst, Mike McCormack, said, "After the market close on Friday, February 24, the Wall Street Journal reported that Sprint’s Board of Directors had walked away from an acquisition of MetroPCS (NYSE: PCS). The deal terms were for a ~ 30% premium to be paid for PCS shares. By our estimate, the suggested deal terms implied ~$5bn of equity value, the assumption of $2.3bn of debt, or 5x MetroPCS’ 2011 EBITDA. Sprint would have needed to issue ~2.5bn shares, assuming a ~$2 share price. Equity holders would have faced nearly 50% dilution. The M&A headline adds further uncertainty for Sprint investors. Investors are being asked to look to 2017 for a sense of “normalized” financial results. In our view, such an outlook is well beyond the investible horizon of most investors."
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 $2.47 yesterday.
Analyst, Mike McCormack, said, "After the market close on Friday, February 24, the Wall Street Journal reported that Sprint’s Board of Directors had walked away from an acquisition of MetroPCS (NYSE: PCS). The deal terms were for a ~ 30% premium to be paid for PCS shares. By our estimate, the suggested deal terms implied ~$5bn of equity value, the assumption of $2.3bn of debt, or 5x MetroPCS’ 2011 EBITDA. Sprint would have needed to issue ~2.5bn shares, assuming a ~$2 share price. Equity holders would have faced nearly 50% dilution. The M&A headline adds further uncertainty for Sprint investors. Investors are being asked to look to 2017 for a sense of “normalized” financial results. In our view, such an outlook is well beyond the investible horizon of most investors."
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 $2.47 yesterday.
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