T-Mobile trades higher after Raymond James says the SpaceX threat is overstated

Raymond James upgraded T-Mobile US Inc. (NASDAQ: TMUS) to an "Outperform" rating from "Market Perform," citing a price target of $170.00. This move comes as T-Mobile's stock is trading near its 52-week low of $147.90, marking a decline of nearly 10% over the past week and 26% year-to-date. The firm addressed recent concerns about competition from SpaceX, stating that these fears are overstated since the satellite company is still over three years away from entering the mobile market.

Raymond James emphasized that T-Mobile possesses significant advantages in spectrum and terrestrial network capabilities compared to its competitors, including larger players. They noted that while owning spectrum and building a robust mobile network are two different challenges, T-Mobile's strong position in these areas remains a key asset.

The analyst also highlighted that while T-Mobile trades at a premium to its peers, the valuation appears attractive relative to the firm's assessment of fair value for the industry group.

InvestingPro data suggests the stock is undervalued, positioning it as a potentially compelling opportunity in the market. Raymond James acknowledged that T-Mobile's strategy of converging fixed wireless access and fiber footprint may have limitations, but these are offset by its robust subscriber growth and the group's depressed multiples.

In recent news, T-Mobile has been the focus of updates from various analysts and legal developments, such as settlements in lawsuits regarding misleading advertisements about savings from switching carriers. Despite these challenges, Raymond James maintains a positive outlook on T-Mobile, emphasizing its resilience and growth prospects.