T-Mobile stock rating upgraded to Neutral by Redburn-Atlantic on growth outlook

Investing.com - T-Mobile US (NASDAQ:TMUS), a prominent player in the Wireless Telecommunication Services sector with a market capitalization of $273 billion, received an upgrade from Redburn-Atlantic on Monday, with analyst firm raising its rating from Sell to Neutral and setting a price target of $228.00.

The upgrade comes despite Redburn-Atlantic’s concerns about T-Mobile’s vulnerability to a sustained slowdown in market net additions and wariness about any developed market telecom company trading at or above 10x EV/EBITDA. Currently, T-Mobile trades at an EV/EBITDA multiple of 12.1x, with revenue growing at 5.3% year-over-year.

The firm also highlighted potentially large contingent liabilities related to T-Mobile’s fiber joint ventures, which could add more than $20 billion to net debt depending on earn-out terms, at a premium to its current EV/EBITDA multiple.

Redburn-Atlantic noted that among the three large wireless players, T-Mobile has the least developed fiber strategy and could be the most vulnerable to any concerted market move toward convergence.

Despite these concerns, the firm acknowledged T-Mobile’s long history of meeting mid-term financial guidance and pointed out that on most multiples, T-Mobile is in line with or cheaper than AT&T (NYSE:T) by 2027 while growing faster, with only 5% downside to Redburn-Atlantic’s $228 per share 2026 price target.

In other recent news, T-Mobile US reported positive first-quarter results for 2025, with slight revenue and EBITDA increases and better-than-expected fixed wireless access and prepaid customer gains. Despite these results, the company’s shares have faced a decline, partly due to concerns over high industry activity affecting margins and potential CEO succession issues. S&P Global Ratings revised T-Mobile’s outlook to positive from stable, citing strong earnings growth and free cash flow generation. The company continues to grow its postpaid market share and service revenue, supported by a strong brand reputation and favorable pricing. T-Mobile’s strategy includes aggressive marketing and bundling of fixed wireless access with mobile services, contributing to its market share gains.

Additionally, T-Mobile launched the Revvl Tab 2, an affordable 5G tablet priced at $169.99, available exclusively at T-Mobile and Metro by T-Mobile. This launch is part of T-Mobile’s efforts to expand its product offerings and attract new customers. In another development, SoftBank (TYO:9984) Group Corp. raised approximately $4.8 billion by selling T-Mobile shares to fund its AI initiatives. Lastly, a report suggests that T-Mobile’s CEO, Mike Sievert, may step down before the end of his contract, with Srini Gopalan being a potential successor.

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