Goldman Sachs maintained a Neutral rating on Sprint (NYSE: S) and lowered its price target to $5.00 (from $5.75). The change follows Q3 results. Analyst Brett Feldman noted sub trends are improving but he pointed out top and bottom line pressures.

"Sprint reported CY3Q14 results that were weaker than expected across most key metrics (Exhibit 1). However, management noted that postpaid sub trends improved significantly in September and October, indicating that Sprint’s new go-to-market strategy is gaining traction. While this commentary is encouraging, management also expects the cost of driving a sustained return to growth will be steep. For example, even with a target of $1.5bn in cost cuts in CY15, Sprint is unlikely to see much, if any, EBITDA growth next year. We update our estimates to account for these near-term headwinds and lower our 12-month price target to $5.00 ($5.75)," said Feldman.

"Sprint noted that postpaid phone gross adds improved 37% mom in September. We see this as early evidence that Sprint’s improved offerings are helping the carrier take share, and we raise our postpaid phone net adds estimates. For example, we forecast losses of only 240k in CY15 vs. a net decline of 2.2m in CY14. However, this turnaround is coming at a cost in the form of ARPU pressure and higher customer acquisition costs. The net impact is material reductions to our near/medium term estimates for revenue and EBITDA. While capex appears to be trending lower than expected, we estimate $6.6bn of cash burn during CY4Q14-CY4Q16 vs. $5.3bn of cash and ST investments as of CY3Q14. We believe that Sprint has access to additional liquidity, so we do not see this as a material risk," he added.

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Shares of Sprint closed at $6.20 yesterday.