Wells Fargo upgraded its rating on T-Mobile stock. What sets the operator apart from its competitors?

Wells Fargo upgraded its rating on T-Mobile shares and now advises to buy them. According to the bank, the mobile operator has room to develop in two key segments for growth - rural and corporate. This will allow it to capture market share from key competitors.

Wells Fargo has upgraded shares of telecommunications company T-Mobile from Equal Weight ("on par with the market") to Overweight ("above the market"): now it recommends not to hold, but to buy securities , writes CNBC. In addition, the bank has increased the target price of shares to $260. It implies the potential growth of quotations by almost 15% relative to the closing level on October 15.

T-Mobile shares were initially up 1.5% in trading on October 16, but then lost all of their gains and began to decline by about 0.5%. Compared to the beginning of 2025, they are now only 2.2% more expensive.

"The valuation differential between T-Mobile and rivals AT&T and Verizon has narrowed. While the company's securities are still trading at a premium to the sector, we believe this is the time when it is best positioned to outperform," Wells Fargo analyst Eric Lubchow wrote in a CNBC note.

According to the analyst, T-Mobile is able to maintain leadership in the industry in terms of subscriber growth and service revenues. At the same time, according to him, the company still has room for development in two key segments - rural areas and the corporate sector.

In the latter, T-Mobile is already taking share from the main player - Verizon, believes Walls Fargo. In the future, "the main potential for share growth" will be in rural markets, which will be facilitated by the company's acquisition of the mobile business of US Cellular.

Lubchow also noted that despite fears of an industry-wide slowdown, he estimates T-Mobile will be able to attract 2.5-3 million new subscribers annually (including more than 3 million in 2025) and continue to gain market share over AT&T and Verizon.

This week, RBC analyst Jonathan Atkin upgraded T-Mobile's stock rating from Neutral to Buy, while leaving his target price at $270 per share. His estimate implies a 19% increase in quotes.

According to RBC, the company will soon show a noticeable increase in new customers compared to its competitors and will be able to improve business efficiency thanks to US Cellular assets. The RBC analyst believes that T-Mobile is ahead of its rivals due to incentivizing conversions from other carriers and new iPhone promotions without having to surrender the old device. Despite a general slowdown in subscriber growth in the industry, RBC believes T-Mobile remains "in a good position."

In total, the stock has 29 recommendations from analysts, MarketScreener shows. 18 analysts advise to buy securities (ratings Buy and Outperform), 10 more recommend to hold (Hold). Only one analyst has issued a Sell rating.

This article was AI-translated and verified by a human editor