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Investing.com - KeyBanc Capital Markets downgraded T-Mobile US (NASDAQ:TMUS) from Sector Weight to Underweight on Wednesday, setting a price target of $200.00. The wireless telecommunications giant, currently valued at $268 billion, has seen its stock rise over 33% in the past year despite recent analyst concerns. According to InvestingPro data, two analysts have recently revised their earnings expectations downward for the upcoming period.
The downgrade comes as KeyBanc expressed concerns about T-Mobile being "fiber deficient in a converged/bundled world," which the firm believes puts the carrier at a disadvantage against competitors with stronger fiber infrastructure. Despite these concerns, T-Mobile maintains strong financial health with a 63.85% gross profit margin and revenue growth of 5.31% over the last twelve months.
KeyBanc also cited near-term macroeconomic and competitive pressures that could limit upside potential, along with a deterioration in T-Mobile’s consumer value proposition following recent pricing actions that may prevent the company from capturing an outsized share of industry net additions.
The research firm noted that T-Mobile would likely benefit less than peers from potential tax changes due to OBBB (Optimized Broadband Buildout Benefits), further supporting the downgrade rationale.
KeyBanc analysts consider T-Mobile’s premium valuation excessive at approximately 9.5 times their 2026 adjusted EBITDA estimates, compared to the three-year average of 9.4x and peer average of 7.6x, leading the firm to lower its financial estimates for the wireless carrier. Current analyst price targets range from $220 to $305, with deeper insights available through InvestingPro’s comprehensive research reports, which cover over 1,400 US stocks.
In other recent news, T-Mobile US reported positive first-quarter results for 2025, showing slight increases in both revenue and EBITDA, alongside better-than-expected gains in fixed wireless access and prepaid customers. Despite the positive results, the company’s shares have seen a decline, partly due to concerns over high industry activity affecting margins and potential CEO succession issues. T-Mobile is also making headlines with the launch of its new Revvl Tab 2 tablet, priced at $169.99, which it claims is the most affordable 5G tablet in the market. Promotions are available for new and existing customers, including offers that make the tablet free under certain conditions.
In a significant transaction, SoftBank (TYO:9984) Group Corp. sold $4.8 billion worth of T-Mobile shares as part of its strategy to fund artificial intelligence initiatives. The sale involved 21.5 million shares at $224 each, marking a 3% discount to T-Mobile’s previous closing price. Analyst firm BofA Securities has reinstated coverage on T-Mobile with a Neutral rating, citing high institutional ownership and record growth forecasts. Meanwhile, Redburn-Atlantic upgraded T-Mobile’s rating from Sell to Neutral, despite concerns over market net additions and contingent liabilities. TD Cowen has maintained its Buy rating on T-Mobile, emphasizing the company’s ability to navigate industry challenges while expanding in rural markets.
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