T-Mobile stock gets a downgrade amid competitive concerns

T-Mobile US Inc.

faces stiff competition in the wireless market that could further slow its share gains, according to KeyBanc Capital Markets analyst Brandon Nispel. He downgraded T-Mobile’s stock to sector weight from overweight Sunday, in a note titled “Just Another Carrier.” In Nispel’s view, the cable industry could be the biggest share gainer in the wireless market, and he expects cable operators to continue winning share. As for T-Mobile, he worries that “the postpaid to prepaid migration is taking above-normal share of TMUS’s own postpaid phone net additions, suggesting lower quality net additions.” Nispel argued that fellow wireless operators Verizon Communications Inc.

and AT&T Inc.

are both positioning their offerings competitively, with Verizon in particular rolling out a compelling plan full of “differentiated” add-ons like free limited-time access to Walt Disney Co.’s

Disney+ streaming service and Apple Inc.’s

Apple Arcade gaming subscription. Further, Nispel wrote that T-Mobile’s recent data breach “is likely to take some wind out of the sail, just at a time when competitors are ramping up.” Shares of T-Mobile have lost 2.2% over the past three months as the S&P 500 [S: SPX] has gained 7.3%.

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