Shares of MetroPCS hit a 52-week low of $6.16. The stock's 52-week high of $18.52 was set on June 1."Leap Wireless has announced the launch of the iPhone 4S under its Cricket brand beginning June 22," BMO Capital Markets analysts wrote in a report Thursday. "The unlimited text, talk and data ([less than] 2.3GB/month) plan will cost $55 per month with subsidized retail device costs of [about] $400 (8GB)/ [about] $500 (16GB). The three-year commitment with Apple will cost [about] $900 million and applies to future device launches. The cost represents about a third of device costs for Leap over this period and is expected to represent [less than] 10% of its sales mix. With the iPhone restricted to PCS frequencies, Leap's launch is restricted to 70% of its network footprint ([about] 60mm POPs). Leap expects no impact on EBITDA or capital intensity for 2012, with general expectations for value accretive over time (higher ARPU, lower churn). Leap noted that a significant portion of its churn was attributable to customers leaving to get the iPhone and that currently 50% of its gross adds were from contract carriers, suggesting a sizeable market opportunity. Leap noted that handset pricing should not represent an impediment to demand. We see the iPhone launch as slightly negative for Leap given that it raises near-term uncertainty particularly given the prospect of an iPhone5 launch. For MetroPCS we also see this as negative given that it will continue to have a device disadvantage until LTE devices gain greater scale." MetroPCS has a forward P/E of 8.48; the average for mobile telecommunications companies is 17.2. Twenty-seven of the 31 analysts who cover MetroPCS rated it hold. Three analysts gave the stock a buy rating and one rated it sell. The stock has fallen 27.65% year to date.
Peabody Energy Shares of Peabody Energy hit a 52-week low on Thursday of $22.75. The stock's 52-week high of $63.08 was set one year ago. "We raise BTU to Buy for three reasons: (1) Improving China macro data and Newcastle thermal prices should drive greater Street credit for BTU's Australia business (better growth profile than covered US peers). (2) BTU is exposed to our view that PRB-levered stocks should see improved relative performance as PRB prices continue to rise from below cash costs today to mid-cycle by the end of 1H2013. (3) Its valuation given a 9% 3-year EBITDA CAGR screens favorably vs. the coverage group. Also, discussion of China thermal and Mongolia met coal JVs remain potential long-term catalysts," Goldman Sachs analysts wrote in a May 28 report. Peabody Energy's forward P/E is 6.35; the average for coal companies is 16.76. For comparison, Walter Energy (WLT) has a higher forward P/E of 7.01. Twenty-six of the 30 analysts who cover Peabody Energy rated it buy. Three analysts gave the stock a hold rating and one rated it sell. The stock has fallen 29.48% year to date.
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