T-Mobile stock reinstated at Neutral by BofA with $255 price target

Investing.com - BofA Securities reinstated coverage on T-Mobile US (NASDAQ:TMUS) Monday with a Neutral rating and a price target of $255.00. The target sits within the current analyst range of $203-$305, with the stock trading at $240.75. According to InvestingPro analysis, T-Mobile’s current valuation appears fairly priced relative to its Fair Value.

The research firm cited T-Mobile’s premium valuation, high institutional ownership, and record high growth forecasts as factors that leave limited room for upside potential in the stock. With a P/E ratio of 23.3x and a market capitalization of $273 billion, T-Mobile maintains its position as a prominent player in the Wireless Telecommunication Services industry, as highlighted by InvestingPro’s analysis.

BofA acknowledged T-Mobile’s industry leadership in post-paid phone net add share, revenue and EBITDA growth, and free cash flow expansion, but expressed concerns about the company’s future competitive positioning. The company’s financial strength is evident in its $31.6 billion EBITDA and 5.3% revenue growth over the last twelve months.

The firm suggested T-Mobile might follow cable companies with more competitive pricing and promotional offers based on its commitment to achieve 5.5-6 million postpaid net additions, which the firm described as "its highest ever postpaid net addition guidance."

BofA analysts warned of a potential "Catch 22" scenario where T-Mobile either sacrifices average revenue per user and profit by following aggressive pricing strategies, or risks losing market share and missing its key metric of net additions.

In other recent news, T-Mobile US reported positive first-quarter results for 2025, with revenue and EBITDA showing slight upside and better-than-expected customer gains in fixed wireless access and prepaid segments. TD Cowen reiterated its Buy rating on T-Mobile, maintaining a price target of $272.00 and highlighting the company’s growth potential despite industry challenges. Meanwhile, Redburn-Atlantic upgraded T-Mobile’s stock rating from Sell to Neutral, setting a price target of $228.00, while expressing concerns about the company’s fiber strategy and potential liabilities.

In another development, 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. The company is offering various promotions for the new device, emphasizing its access to America’s leading 5G network. Additionally, SoftBank (TYO:9984) Group sold $4.8 billion worth of T-Mobile shares, raising funds for its AI initiatives, which led to a decline in T-Mobile’s stock.

Furthermore, T-Mobile’s CEO, Mike Sievert, is expected to step down before the end of his contract, with Srini Gopalan being considered as a potential successor. The exact timing of the leadership change remains unspecified. These recent developments highlight T-Mobile’s ongoing strategic moves and market activities.

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