UPDATE: T-Mobile US, (TMUS) PT Raised to $170 at Wells Fargo after a Bullish Analyst Day
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Wells Fargo raised its price target on T-Mobile US, (NASDAQ: TMUS) to $170.00 (from $155.00) while maintaining a Overweight rating after attending the company's analyst day where FCF was the highlight of the day.
The analyst stated "The FCF unlock really ramps in 2023-26 as integration costs fall away and cost synergies ramp. But the net result in 2026 is levered FCF margins of nearly 20%, per guidance, above both VZ and T today (~15-16%). The key inputs are service revenue growth of ~4% (boosted by growth adjacencies such as home broadband, enterprise and rural expansion), $7.5B of annual cost synergies (including$5.5B of hard costs) and more moderate capex (~$1-2B lower than expected through 2026). Importantly, TMUS outlined multiple areas that could oer upside to its guide tha twe're not explicitly modeling today. We believe TMUS remains the key growth name to own in wireless, and we reiterate our Overweight. Our price target based on a 7-year DCFis $170/share (vs. $155 prior), or ~9x 2022E EV/Core EBITDA."
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