Sprint Corp. (NYSE: S) has had a relatively positive 2019 so far, but one analyst believes that its luck is running out. Although Nomura Instinet is not overtly negative on the stock, there are a series of factors that might slow it down.

The firm issued a Neutral rating with a price target of $6, which implies downside of roughly 15% from the most recent closing price of $7.04.

Nomura said that it is adjusting its net add assumptions to reflect transfers from prepaid to postpaid. The firm also is reducing its capital expenditure estimates slightly to reflect a more moderate spending pace as the merger with T-Mobile awaits approval. It expects service revenue to decline through the year while churn will remain elevated.

Nomura raised its postpaid net add estimates for the fiscal first quarter to 30,000 from −25,000. For the 2019 full year, the firm raised its postpaid forecast to 310,000 from 125,000. Likewise, it lowered fiscal first quarter and 2019 prepaid forecasts to a net loss of 50,000 and 200,000, respectively.

In its report, the firm further detailed:

We expect postpaid average revenue per user (ARPU) to decline through the year due to promotional activity and a mix shift to other devices, which have a lower ARPU. We are modeling a 2.9% year over year reduction in service revenue for its fiscal first quarter, consistent with the previous quarter, and 3.4% decline for fiscal 2019. We model postpaid churn of 1.75% for both the fiscal first quarter and fiscal full year.

As a result, Nomura revised its estimates:

We are forecasting fiscal 2019 revenue, adjusted EBITDA, and EPS of $31.9 billion, $11.5 billion, and $0.04, respectively. Our capex revisions drive fiscal 2019 Adjusted free cash flow to $(444 million) from ($1.0 billion). We hold our target at $6, which equates to 7.5x our calendar year EBITDA net of handset depreciation related to leasing. Peers trade near 7.0x, which would equate to a $5 target.

Shares of Sprint traded down about 1% Monday to $6.97, in a 52-week range of $5.35 to $7.90. The consensus price target is $6.27.

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