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How will the T-Mobile-Sprint merger affect the users?



On July 26, the Justice Department (Justice Department) approved a proposed $ 26.5 billion merger agreement between T-Mobile (TMUS) and Sprint (S). According to DOJ Assistant Attorney General Macan Delrahim, the merger of T-Mobile and Sprint would increase competition in the wireless network market and be of benefit to consumers. Delrahim thinks the merger is good for wireless consumers in rural areas. Delrahim spoke on Fox Business Network on Tuesday. He said, "You will now have Sprint, T-Mobile combined with the medicines we put in, giving real competition to AT&T and Verizon for the first time to consumers."

Merger case of T-Mobile and Sprint

The merger of T-Mobile and Sprint has been brought before the District of Columbia and about 1

7 states. On Wednesday, Pennsylvania Attorney General Josh Shapiro joined the case, opposing the combination of the third and fourth largest mobile operators in the United States. Pennsylvania became the 18th state to join a multilateral trial.

Shapiro stated, "A merger between T-Mobile and Sprint would seriously undermine competition in the telecommunications sector, which would hurt consumers in Pennsylvania by raising prices, limiting coverage and reducing it. quality. "

Attorney General of New York Letitia James directs the multilateral trial. James said, "The addition of Pennsylvania to our lawsuit increases states' momentum against this megahermer, which continues to be bad for consumers, bad for workers and bad for innovation." She also said, "We welcome Pennsylvania and Attorney General Shapiro in our a multilateral coalition that continues to build strength and now includes every region of the nation. "

Merger Concerns

The multistate case alleges that the combination of T-Mobile and Sprint can reduce competition and increase customer costs. In particular, the antitrust process should start in December. The merger transaction is not expected to be completed until the state's litigation has been resolved.

Last month, FCC Chairman Aith Pie recommended the approval of the proposed merger agreement. To gain regulatory approval, T-Mobile and Sprint have agreed to sell the prepaid business to Sprint and some Dish Network wireless spectrum.

Stock Performance

Shares of T-Mobile fell about 0.11% on Wednesday. Meanwhile, the stock closed the day at $ 80.12. The stock is trading 5.98% below the 52-week high of $ 85.22 it saw on July 26. In particular, the stock is trading 33.62% higher than the 52-week low of $ 59.96 it saw on December 26, 2018. T-Mobile stock is back about 26.0% since the beginning of the year (19659004] The five-day delay after one month and the subsequent 12-month price movements were 0.5%, 3.1% and 17.0%, respectively. Based on Wednesday's closing price, the shares were trading 2.2% above the 20- Its daily moving average of $ 78.43, T-Mobile's stock was trading 2.0% above its 50-day moving average of $ 78.53.

The company is trading 4.2% above 100- your living room is mobile With a 14-day relative strength ratio of 60, the stock is nearing the overbought zone

On Wednesday, T-Mobile's shares closed near the upper Bollinger Band range of 80, $ 1965, indicating that it was repurchased.

On the same day, Sprint shares fell 0.74% and closed at $ 6.73. AT&T (T) shares fell 1.08% to $ 36. 76. AT&T and Sprint returned 28.8% and 15.6%, respectively, of YTD.

T-Mobile's market cap is $ 68.5 billion, while AT&T and Sprint have market cap of $ 268.6 billion and $ 27.6 billion, respectively.

Analyzer Recommendations And Target Price

Most analysts have given T-Mobile a buy rating. Among the 20 analysts, 16 recommend "buy" while four recommend "hold". None of the analysts gave the stock a "sell" rating.

Currently, analysts have a 12-month price target of $ 88.53 on stock. On Wednesday, the shares were trading at a discount of 10.5% over the analyst's target price for 12 months. The average target price is $ 90.00. from Wednesday.

The transmitted PE ratio of T-Mobile

T-Mobile has a PE ratio of front of 20.00x for 2019. For 2020, the ratio is 16.71x. Adjusted EPS could grow by 19.3% in 2019 and 19.7% in 2020.

The stock looks expensive given the expected profit growth for 2019. However, the stock looks cheap based on expectations 19.7% earnings growth and a PE ratio of 16.71x for 2020

To learn more about the merger deal, read T-Mobile and Sprint's Merger: What Should an Investor Do? and how the dish can benefit from state pressure on T-Mobile. You can also read T-Mobile and a sprint merger can lead to job loss.


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