T-Mobile US is a buy as it focuses on raising revenue and lowering expenses at a time when its stock is trading at a discount, according to Oppenheimer. The investment firm upgraded the stock to outperform. It also set a price target of $260 on shares, suggesting 39% upside from Tuesday's close. "TMUS reported an in-line quarter and modestly raised guidance, but company positioned to use AI to raise prices, slash expenses, and grow new services," analyst Timothy Horan said in a note. "We expect TMUS to focus on closing the ~20% price discount with peers while keeping expenses relatively flat and reducing subsidies—all accretive to margins and [free cash flow]." The analyst also called T-Mobile a "deep value stock," noting that it's trading at its lowest EBITDA multiple in five years. Shares of the mobile phone carrier have fallen 23% over the past year as its business faces fierce competition from rivals like AT & T. TMUS 1Y mountain Shares have declined about 23% over the past 12 months. Yet the stock ticked 2% higher after T-Mobile reported its first-quarter earnings results after the bell Tuesday. The company raised its forecast for year-end adjusted EBITDA to a range of $37.1 billion to $37.5 billion, more than the $36.98 billion expected by analysts polled by FactSet. Earnings and revenue for Q1 also topped expectations. "Maintaining estimates and aligned with modestly raised guidance, TMUS retains major advantages," Horan wrote. "Long-term guidance is also likely conservative with room for upside from M & A and synergies." The analyst also pointed out that T-Mobile may merge with Deutsche Telekom, which would likely "command an attractive premium." He also noted that the firm's buybacks have been strong, with T-Mobile recently increasing its authorization again. Oppenheimer's call falls in line with consensus on the Street. Of the 31 analysts covering T-Mobile, 24 have a buy or strong buy on shares, LSEG data shows.
