Sprint and T-Mobile Merger Comes Closer to Decision

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The ongoing merger saga between T-Mobile US Inc. (NASDAQ: TMUS) and Sprint Corp. (NYSE: S) finally may be coming to a close. Investors were bidding up shares of both companies after The Wall Street Journal reported that regulators seem more likely to approve the $26 billion merger that would take the four top cellular companies down to three. It also would create a playing field generally deemed to have financially healthier players.

If approved, the news also would be good for AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). Their number-one and number-two positions also would come with a climate in which carriers might not have to cut each other’s throats over costs and incentives that lead to switching carriers as much as has been seen in recent years.

T-Mobile shares were up just over 1%, while Sprint shares were up over 6% as Sprint is the acquisition target. While The Wall Street Journal’s article points to the U.S. Department of Justice approving the merger, there are still many states and many worker groups that are against the merger for being anti-competitive and bad for the employees in the industry.

There is also the angle that Dish Network Corp. (NASDAQ: DISH) will acquire prepaid subscribers and wireless spectrum licenses from T-Mobile and Sprint as part of the settlement to gain approval. How that would play out remains to be seen, and it creates one less major carrier for the cellphone tower operators as well. Meanwhile, other players have emerged as potential wireless carriers, but the field is also ready quite crowded and years beyond growth at this stage.

Here’s how shares of these players were faring on last look:

• Sprint: up more than 6% on the day to $7.56. The 52-week trading range is $5.36 to $7.90, and the consensus price target is $6.27.
• T-Mobile: nearly 2% higher to $79.66, in a 52-week range of $58.51 to $80.93. The consensus price target is $83.83.
• AT&T: up more than 2% to $32.87. The 52-week range is $26.80 to $34.37. The consensus price target is $33.70.
• Verizon: fractionally higher to $55.88, with a 52-week range of $50.81 to $61.58. The consensus analyst target is $59.61.
• Dish: almost 2% lower, at $43.26 in a 52-week range of $23.22 to $44.65. The consensus price target is $47.70.

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