T-Mobile US Well Positioned to Withstand Broader Sector Pressure, BofA Says

T-Mobile US's (TMUS) minimal exposure to the competitive threat by low-Earth-orbit service providers, combined with its flexibility to increase prices, positions the wireless network operator to withstand broader telecom sector headwinds, BofA Securities said Monday. The brokerage raised T-Mobile's rating to buy from neutral while maintaining a $220 price target. The US telecommunication stocks have sold off amid fears that LEO constellations could disrupt the broadband and wireless market, while Charter Communications (CHTR) and Comcast (CMCSA) could combine. Among telcos, the carrier faces the lowest exposure to the satellite technology because T-Mobile's market share is heavily skewed toward urban markets rather than rural regions. "LEO direct-to-device service has been concentrated in rural and underserved environments and may face propagation and capacity limits in more urban environments," BofA analysts Michael Funk and Matthew Griffiths said. T-Mobile's legacy customers are paying less than those at rivals like AT&T (T) or Verizon (VZ), Funk and Griffiths wrote. That gives T-Mobile "the greatest flexibility to increase price," which could support top-line growth,.