T-Mobile stock price forecast: Morgan Stanley sees a 35% upside

T-Mobile US Inc (NASDAQ: TMUS) has been a disappointment for shareholders this year but a Morgan Stanley analyst is convinced their patience will be rewarded moving forward.

T-Mobile stock should be worth $178

On Thursday, Simon Flannery reiterated his “overweight” rating on the telecom giant and raised his price target to $178 – about a 35% upside from here.

The analyst likes T-Mobile stock for its sizable buyback programme that, following the recent weakness, can be executed at a lower price.

T-Mobile offers investors low leverage, strong free cash flow generation, a recurring revenue model, network leadership, growing market share and reasonable valuations.

He remains bullish even though the network operator came in shy of revenue estimates in its latest reported quarter. Its shares have lost over 10% in less two months.

T-Mobile to expand share in wireless industry

Simon Flannery is confident that the Nasdaq-listed firm will continue to expand its share in the wireless industry which will help it further in outperforming the sector.  

The newly-launched 5G plan, the analyst added, is significantly incremental to the company’s top-line. His research note also reads

We expect the T-Mobile stock to break out of this range over the next few months driven by operating and technical factors.

Morgan Stanley sees wholesale traffic offloading related to Verizon and DISH as a temporary headwind only. On Thursday, famed investor Jim Cramer also conceded that it was hard to be in a price war with T-Mobile US Inc.