Benchmark lifts T-Mobile stock target to $275 on strong growth

On Thursday, Benchmark analyst Matthew Harrigan increased the price target on T-Mobile US (NASDAQ:TMUS) shares to $275 from the previous $255, maintaining a Buy rating. The stock, currently trading at $238.12, has delivered an impressive 47.57% return over the past year. According to InvestingPro, analysts’ price targets for T-Mobile range from $184.95 to $280, reflecting diverse market expectations. The adjustment follows T-Mobile’s impressive performance and market share gains, which were highlighted in the company’s recent quarterly results. T-Mobile’s postpaid phone additions totaled 903,000, accounting for approximately 46% of the total growth among the three major U.S. mobile network operators (MNOs) for the fourth quarter of 2024. This figure represents T-Mobile’s highest quarterly postpaid phone gain to date.

T-Mobile’s success in the market is attributed to its strategy of targeting affluent and urban customers, where the company is making significant inroads. With a substantial market capitalization of $276.16 billion and robust gross margins of 63.57%, InvestingPro data shows T-Mobile’s strong financial foundation. Benchmark’s analysis suggests that T-Mobile can continue to grow by maintaining its strong performance in these key subscriber segments. Additionally, the company is expected to benefit from closing the market share gap in smaller markets and corporate accounts.

CEO Mike Sievert, during Wednesday’s earnings call, reported that T-Mobile is not only holding its ground but also gaining market share in urban areas, a sector where it often leads. OpenSignal and Ookla have reaffirmed T-Mobile’s network and consumer experience leadership, further bolstering the company’s market position.

Looking ahead, T-Mobile has provided an ambitious postpaid connection guidance for 2025, targeting 5.5 million to 6 million connections for the year, marking the highest guidance it has set at the start of a new year. With annual revenue of $81.4 billion and strong market momentum, the company continues to demonstrate its industry leadership. Discover more detailed insights and 8 additional key ProTips about T-Mobile’s growth potential with InvestingPro’s comprehensive research report. This optimistic outlook is supported by the potential for increased consumer switching, driven by expectations of shortened phone replacement cycles due to new AI capabilities, as hinted during this year’s Consumer Electronics Show (CES).

In other recent news, T-Mobile US has been the center of several significant developments. The company has reported strong fourth-quarter results, including an increase in phone subscribers and service revenue, along with improved free cash flow projections for 2025. T-Mobile’s EBITDA growth guidance remains steady with a 5% year-over-year increase. Analysts from Scotiabank (TSX:BNS), Citi, and BofA Securities have respectively raised their price targets for T-Mobile to $247, $268, and $240, while maintaining their ratings. Benchmark analysts have also maintained their buy rating with a target of $255.

Conversely, RBC Capital Markets downgraded T-Mobile from Outperform to Sector Perform. The company has also announced the appointment of Srinivasan Gopalan, formerly of Deutsche Telekom (OTC:DTEGY), as its new Chief Operating Officer. Furthermore, T-Mobile has launched a new shareholder return program, authorizing up to $14 billion in buybacks and dividends through 2025. These are the recent developments in T-Mobile’s journey.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.