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Oppenheimer released a report following the recent AWS-3 auction that details what the future holds for all the telecom stocks fighting for the spectrum. The more pessimistic forecast stems from the higher AWS-3 spectrum valuations, which will lead to higher leverage and interest expense, as well as a half-turn increase in industry multiples.

Sprint Corp. (NYSE: S) was downgraded to an Underperform rating with the rationale that the company will be the most negatively impacted by competitive responses. Oppenheimer believes that the stock is overvalued, after factoring in the $8 billion in expenditures for the broadcast spectrum auctions. The analyst firm also believes that additional share issuances are on the horizon and will cause further equity dilution for Sprint. Still, Shares were down over 5% to $4.32 in the first two hours of trading Wednesday. The stock has a consensus analyst price target of $7.28 and a 52-week trading range of $4.30 to $11.47. Oppenheimer did not assign a formal downside price target in the call.

To clarify the competitive responses that Sprint might face:

Verizon has responded to Sprint with its own promotions and effectively lowered earnings guidance Monday night; we believe that AT&T is seeing the exact same trends. We do not believe that Verizon and AT&T will give up their customers to Sprint or T-Mobile without a very strong fight. In this regard, we continue to see data plan bucket increases which will hurt revenue growth in 2015-16. For example, a large portion of Verizon customers were upgraded to the 15GB plan from 10GB last week for free.

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Crown Castle International Corp. (NYSE: CCI) was downgraded to a Perform rating. The company’s forward multiple has seen about a five-times expansion over the past five or six years to the 17-times range. However, Oppenheimer does not see this trend continuing because organic growth has slowed to the 6% to 7% range. Shares of Crown Castle were down over 1% Wednesday to $78.00 in the first two hours of trading. The consensus analyst price target is $88.59, and the 52-week trading range is $68.44 to $84.97.

Along with the downgrades for Sprint and Crown Castle, Oppenheimer lowered the price targets for Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), considering the higher interest expense and total enterprise value from the current and upcoming spectrum auctions. The price targets were lowered by $2 each to $36 for AT&T and to $54 for Verizon.

T-Mobile US Inc. (NYSE: TMUS) is still considered to have an attractive risk/reward relationship, but new promotions could create near-term headwinds. Oppenheimer believes T-Mobile is “the best way to play the wireless space.” This is due in part to upside from a potential merger or acquisition from either Dish Network Corp. (NASDAQ: DISH) or America Movil SAB de C.V. (NYSE: AMX) in the near-term, and eventually Comcast Corp. (NASDAQ: CMCSA) and Sprint over the next few years.

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Oppenheimer further commented on T-Mobile’s position:

We also suspect that T-Mobile and AT&T will have to ramp up promotions in the next few months. We have also now included our best guesstimates for spectrum purchases in the next two years for each company. This includes $24Bfor Verizon, $22B for AT&T, $10B for T-Mobile and $8B for Sprint. This level of purchases adds 0.5-1.2x increases to the EBITDA multiples. The new multiples for Verizon, for example, would equate to approximately 7x 2016E EBITDA, which is the high end of its historical trading range.