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NEW YORK (TheStreet) -- Sprint's  (S) - Get Free Reportstock rating was lowered to "underperform" from "neutral" at Buckingham Research this morning.

The firm raised its price target to $5 from $3.50, but said it was downgrading the Overland Park, KS-based telecommunications company's stock based on valuation and capital expenditure increases, TheFly reports. 

Sprint shares are trading at a premium relative to its peers and the firm said it doesn't expect the company to generate material free cash until 2018 at the earliest. 

The company's capital expenditures are expected to increase in 2017 to $136 per postpaid customer, up from $94 in 2016, Buckingham said in their analyst note. 

Due to regulatory reasons, Sprint is also unlikely to be targeted for a merger, the firm added. 

Shares of Sprint were higher in mid-afternoon trading on Thursday. 

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