T-Mobile Seen With ‘Strategic Appeal’ And AT&T Best Positioning
The “stand-alone trajectory” of T-Mobile US ( TMUS ) “looks very bright” while long-term prospects for a deal with Dish Network ( DISH ), Sprint, or a cable TV firm are still alive, says Deutsche Bank, which initiated coverage with a buy rating. Matthew Niknam, a Deutsche Bank analyst, also started coverage on AT&T ( T ), rural phone company Frontier Communications ( FTR ) and cell tower companies American Tower ( AMT ) and Crown Castle ( CCI ) with buy ratings. He initiated Verizon Communications ( VZ ), Sprint ( S ), CenturyLink ( CTL ), Windstream, and SBA Communications ( SBAC ) with hold ratings. T-Mobile, with its Uncarrier-branded marketing strategy, has gained market share vs. bigger rivals. Controlled by Deutsche Telekom, T-Mobile has “strategic appeal to potential industry partners,” wrote Niknam. “With video increasingly going mobile, and reports that Comcast ( CMCSA ) has recently triggered its (wholesale) agreement with Verizon, we believe cable companies may increasingly view mobile network ownership as a longer-term strategic option.” While Comcast has plenty financial muscle to pull off an acquisition, Dish Networks’ stock has dropped while Sprint holds more than $32 billion in debt. AT&T’s acquisition of satellite TV broadcaster DirecTV, meanwhile, has bolstered its competitive position, says Niknam. “We believe AT&T is best positioned strategically, given AT&T’s presence across each of the key distribution platforms (mobile, video, wired broadband/phone), and its leadership position (#1 or #2 share ) across each market,” he said. Frontier stock was up about 4.5% in afternoon trading on the stock market today . Sprint and CenturyLink were up more than 2%, and SBA more than 3%. IBD Leaderboard stock AT&T was up almost 1%. Image provided by Shutterstock .