Morgan Stanley expects T-Mobile to start ‘small’ with share buybacks By

© Reuters Morgan Stanley expects T-Mobile ( TMUS ) to start ‘small’ with share buybacks.

By Sam Bugedada

A Morgan Stanley analyst on T-Mobile (NASDAQ:) expects the company to announce the start of its turnaround program in third-quarter earnings.

The analyst has an overweight rating and a $159 price target on the stock.

T-Mobile “told investors that they expect to announce board approval and the start of a share buyback program with 3Q22 earnings in late October/early November (3Q earnings were released last November 2).”

“At the company’s analyst date in March 2021, management outlined shareholder returns of up to $60 billion from 2023 to 2025, but repeatedly indicated that those returns could start sooner.” “The size of this potential program is characterized by >30% of the company’s market value and >65% of the company’s free float (excluding shares controlled by Deutsche Telekom (OTC:) and SoftBank).”

The analyst listed three possible scenarios, starting with a small amount or an earlier policy that did not include any purchase announcements. Morgan Stanley believes T-Mobile will start small.

“Our base case is very similar to Scenario 2. We anticipate $12 billion in buybacks in 2023, although we don’t officially plan for an early start in 2022,” the analyst commented. “We await the official approval/commencement of the acquisition to respond positively to the shares.”

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