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On Wednesday, BofA Securities maintained a positive stance on T-Mobile US (NASDAQ:TMUS) shares, reiterating a Buy rating and a $240.00 price target. The telecom giant, with a market capitalization of $256.6 billion and a "GOOD" financial health score according to InvestingPro, has attracted positive attention from analysts, with three recently revising their earnings estimates upward. T-Mobile surpassed expectations with its recent financial and operational results, outperforming consensus estimates. The company reported postpaid phone net additions of 903,000, exceeding both the BofA’s projection and the higher-than-expected industry estimate of 857,000. With trailing twelve-month revenue of $80 billion and an impressive 63.8% gross profit margin, T-Mobile also achieved total service revenue that beat both BofA’s and the consensus estimates, thanks to stronger-than-anticipated wireless Average Revenue Per User (ARPU). InvestingPro subscribers can access detailed financial metrics and 8 additional key insights about T-Mobile’s performance.
The company’s core adjusted EBITDA reached $7.9 billion, topping the Street’s forecast of $7.8 billion. BofA’s analyst highlighted T-Mobile’s continued solid subscriber and financial growth within a robust industry environment characterized by record-low competition among facilities-based providers. The firm’s endorsement comes as T-Mobile provided forward-looking guidance for 2025, which includes expectations of postpaid net additions between 5.5 and 6.0 million, core adjusted EBITDA ranging from $33.1 to $33.6 billion—surpassing the Street’s average estimate of $33.3 billion—and capital expenditures at $9.5 billion, slightly below the $9.6 billion consensus.
T-Mobile’s free cash flow projections for 2025 are also promising, with the company forecasting between $17.3 and $18.0 billion, which is ahead of the Street’s expectation of $17.2 billion and aligns with BofA’s more optimistic estimate of $17.7 billion. The stock has demonstrated strong momentum with a 25.9% return over the past six months and maintains relatively low volatility with a beta of 0.55. The telecom giant’s upcoming conference call, scheduled for 8:00 AM ET, is expected to provide further insights into the timing of planned investments that may temporarily slow core adjusted EBITDA growth in 2025. For comprehensive analysis and valuation insights, investors can access T-Mobile’s detailed Pro Research Report on InvestingPro. Additionally, T-Mobile is anticipated to discuss the timing of its three pending acquisitions—LUMOS, UScellular, and Metronet—all slated for completion in 2025, as well as its capital return plans for that year. The call will be available via webcast for interested parties.
In other recent news, T-Mobile has been a focal point of several significant developments. Benchmark analysts maintained their Buy rating for T-Mobile, citing the company’s leadership in 5G technology and positive indications from the broader mobile market. The firm’s reiterated price target of $255 reflects ongoing optimism about T-Mobile’s performance in the competitive mobile services landscape.
Meanwhile, T-Mobile announced the appointment of Srinivasan Gopalan, formerly of Deutsche Telekom (OTC:DTEGY), as its new Chief Operating Officer. He will be responsible for leading technology initiatives and overseeing operations for both consumer and business groups. Concurrently, the company launched a new shareholder return program, authorizing up to $14 billion in buybacks and dividends through December 31, 2025.
In analyst news, RBC Capital Markets downgraded T-Mobile from Outperform to Sector Perform, following a reassessment of the valuation model in light of higher interest rates. However, Citi maintained its Buy rating on T-Mobile, forecasting a service revenue growth of approximately 4.5% in the fourth quarter of 2024.
T-Mobile also reported the addition of 315,000 new postpaid accounts and 865,000 postpaid phone net subscribers, surpassing expectations. These are among the recent developments in T-Mobile’s journey.
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