Wells Fargo & Company: T-Mobile (TMUS.US) leads industry in user growth, upgrades rating to "Buy"

With the widest 5G coverage and strong mid-band spectrum to provide fast and scalable wireless services, T-Mobile (TMUS.US) is expected to continue leading the industry in terms of user numbers and revenue growth, prompting Wells Fargo & Company to upgrade the stock rating from "hold" to "buy". Wells Fargo & Company analyst Eric Luebchow said, "From the perspective of wireless network performance, T-Mobile is strategically ahead of its competitors." He pointed out that its valuation premium compared to competitors AT&T (T.US) and Verizon (VZ.US) has narrowed. Although the stock still has a premium relative to these competitors, Luebchow believes that at its current level, T-Mobile is more competitive than its rivals. On the other hand, Luebchow believes that Verizon, which was given a hold rating, will continue to fluctuate within a certain range until new CEO Dan Schulman clearly outlines the strategic direction. Luebchow said, "For Verizon, the recent situation remains severe, with continued net losses in consumer wireless in the third quarter, and our EBITDA estimates will also decrease slightly due to Verizon's increased promotional efforts in the fourth quarter." Against the backdrop of slowing user growth and intensified competition in the wireless market, Luebchow predicts that there will be more promotional activities in the fourth quarter. This leads Verizon to face the "most difficult climb" to return to its higher postpaid mobile sales target for the 2025 fiscal year, while the expected sales for T-Mobile and AT&T seem achievable. He added, "We expect T-Mobile to easily maintain its leading position in postpaid user growth in the coming years...and continue to surpass its three major competitors in market share." He pointed out that the competitive differences between Verizon and AT&T mainly stem from considerations of the privatization/value of their wireless services. In the past two years, Verizon and AT&T have been most active in raising user fees, while T-Mobile has provided higher value on its "base rates."