Bearish predictions of slowing subscriber growth for wireless services chipped away at Sprint's share price in recent weeks, and now the stock is off 42% from its 2001 high. But A.G. Edwards & Sons' analyst Paul Luhmann says the subscriber slowdown is more a symptom of the economic downturn than indicative of a trend in the business.
What's more, an across-the-board rocky fourth quarter could lead to consolidation. Whether Sprint snaps up other businesses or not, Luhmann says, fewer competitors will mean more stability and value for remaining wireless stocks.
J.P. Morgan likes the stock, too. The firm says Sprint's widespread service offering and competitively priced packages will help it emerge from this slump as a winner.
The company is expected to report a hefty $1.24 per share loss for 2001. But analysts polled by Thomson Financial/First Call expect Sprint to narrow that loss substantially this year and turn a profit of 27 cents per share in 2003. According to A.G. Edwards' calculations, the stock has the potential to reach $30.
