Deutsche Bank Downgrades MetroPCS (PCS) to Hold; Expecting Net Subscriber Losses Until LTE Re-launch in 4Q

Deutsche Bank downgraded MetroPCS (NYSE: PCS) from Buy to Hold, price target cut to $9.00.

Deutsche analyst said, "Our updated model now reflects an outlook for net subscriber losses during the next 2 quarters due to a pause in marketing ahead of the planned LTE re-launch in 4Q, and intensifying competition. This pullback in promos may boost EBITDA and cash flow near term, but will likely elevate investors' concerns as the business drifts through the seasonally slow spring and summer. While the stock is arguably cheap following its recent decline, we believe the next potential positive catalyst is a return to more robust sub growth in 4Q and are therefore moving to the sidelines until visibility improves."

Deutsche Bank Updates Estimates:

2012: EBITDA $1.36B ($1.39B), net adds -78k (+750k), churn 3.4% (3.7%), ARPU
$40.58 ($40.77), capex $944M ($950M), FCF $54M ($171M)

2013: EBITDA $1.53B ($1.69B), net adds +300k (+750k), churn 3.5% (3.6%),
ARPU $41.00 ($41.25), capex $943M ($897M), FCF $317M ($522M).

For an analyst ratings summary and ratings history on MetroPCS click here. For more ratings news on MetroPCS click here.

Shares of MetroPCS closed at $7.08 yesterday.

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