Sprint Nextel Rises After Goldman Sachs Analyst Upgrades Rating to `Buy'
Sprint Nextel Corp. climbed the most in more than three months after a Goldman Sachs Group Inc. analyst raised his rating on the shares, projecting fewer subscriber cancellations than in previous years.
Sprint, based in Overland Park, Kansas, rose 38 cents, or 8.6 percent, to $4.79 at 4 p.m. in New York Stock Exchange composite trading, the biggest increase since Feb. 2. The shares have gained 31 percent this year.
Sprint, the third-largest U.S. mobile-phone carrier, added fewer two-year contract customers in 2008, reducing “the logical pool of churn subscribers” this year, Jason Armstrong, an analyst at Goldman Sachs in New York, said in a note yesterday. He raised his rating to “buy” from “neutral” and the 12-month price target to $6 from $3.50.
Revenue this year is likely to be $32.2 billion, up less than 1 percent from his previous estimate, Armstrong said. In 2011, sales probably will be $32.5 billion, an increase of 1.2 percent from Armstrong’s prior projection.