T-Mobile sees stronger subscriber growth than its wireless peers

Investing.com -- RBC Capital Markets upgraded T-Mobile US to Outperform from Sector perform saying there is a strong subscriber growth momentum and also on benefits from its recent UScellular acquisition.

The brokerage kept its price target at $270, which is around 22% upside, and said T-Mobile’s shares trade at their lowest valuation in more than a year at about 9.9 times expected 2026 EBITDA.

RBC’s channel checks suggest T-Mobile maintained aggressive customer acquisition in the third quarter, offering an $800 switcher incentive while rivals scaled back promotions before reinstating them in September.

The company also expanded offers around the iPhone launch and marketed new services such as its Direct-to-Cell feature and SuperMobile for businesses.

While industry-wide subscriber growth is expected to moderate, RBC said T-Mobile is positioned to gain share in a high-churn environment, with incremental marketing spending accounted for in its forecasts.

It expects continued growth from higher-tier plans, rural markets and fixed wireless services.

The acquisition of UScellular is another medium-term driver, with targeted synergies of $1.2 billion in operating and capital expenses, RBC said.

The firm noted that T-Mobile’s $50 billion capital return program and $20 billion buffer announced last year remain intact despite the deal.

Leadership changes are also in focus, with CEO Mike Sievert set to step down after the third quarter, to be succeeded by Srini Gopalan. RBC said Sievert is unlikely to leave the company on weaker performance and expects momentum to continue under new management.

RBC’s estimates for core adjusted EBITDA of $34 billion in 2025 and $38.1 billion in 2026 are slightly above consensus. The firm said faster-than-expected subscriber growth could boost cash flow further.

Shares of T-Mobile are up 1.5% on Tuesday trading, and down about 5% YTD.

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