In spite of the topsy-turvy nature of the will-they-won’t-they situation regarding T-Mobile and Sprint, Deutsche Bank analyst, Matthew Niknam, advised in a note to investors today that now is the right time to invest in T-Mobile stock, raising the rating from ‘hold’ to ‘buy.’ This is with keeping in mind a reported drop in T-Mobile stock in the wake of the confirmation a deal between the two US carriers is no longer on the cards.
In fact, it is partly this dipping in share value which has added to the analyst’s suggestion that now is the right time to buy. As in spite of the market viewing the lack of a deal negatively at the moment, Niknam sees T-Mobile’s position in a positive light. With the analyst providing some real-world examples of why T-Mobile is now even more worth investing in than before the confirmation of the absence of a merger. Most notably, while a merger may have added to the value of T-Mobile in the long-term, also in the long-term, the process of finalizing the merger would have likely led to significant delays due to aspects including, but not limited to, regulatory concerns. Which also may have in turn slowed down the company’s operational progress in the near-term.
Instead, Niknam points out how T-Mobile is now back in a position where it can continue to work and focus on expanding its own services. More relevantly, Niknam notes how while the US carrier market is understood to be reaching a ceiling of sorts (due to a combination of aspects such as the increase in options, as well as general stagnation of the market as a whole), T-Mobile is in a better position than most other carriers to ride out the current market conditions, and is even capable of continuing to find new growth avenues. On a related note, on Monday a number of analysts (including from Deutsche Bank) suggested that in spite of what would have manifested as a greater threat through a combined Sprint and T-Mobile entity, AT&T and Verizon are likely to suffer in some respects from the lack of a done deal. In no small part due to the lack of a deal resulting in no meaningful change to the current wireless landscape in the US, and in turn less likelihood of new forms of competition which may have led to a reignited market.