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Investing.com -- Citi resumed coverage of Telephone and Data Systems and its subsidiary Array Digital, formerly US Cellular, with Buy ratings, saying recent asset sales have reshaped both companies and opened new paths for financial growth.
The broker set a $45 price target for TDS and a $37 target for AD, and forecast a $21 special dividend for AD in 2026. The companies have agreed to sell their wireless operations to T-Mobile and to divest spectrum, though those transactions are still pending.
Citi said the two firms have further value to unlock once the remaining spectrum sales close.
It expects the deals to trigger additional special dividends from AD and support a $500m share buyback at TDS, equal to more than 11% of its market value. It also sees scope for improved earnings from AD’s tower assets and faster fiber deployment at TDS following the divestitures.
Citi updated its models to reflect third quarter results, 2025 guidance and the removal of US Cellular’s wireless business from its forecasts.
The estimates now include the pending spectrum transactions and the associated special dividends expected through 2026, as well as potential proceeds from the final 30% of spectrum in later years. The new buyback authorization at TDS is reflected from 2026 onward.
Citi said the asset sales strengthen TDS’s ability to generate year on year financial growth by shifting the mix toward fiber revenue, investment income and better use of tower assets.
It added that the company now has the flexibility to balance network investment with shareholder returns, while AD retains optionality should it choose to sell the last tranche of spectrum in its portfolio.