(USM) US Cellular – Bear of the Day

We are downgrading our recommendation on US Cellular (USM) to Underperform as the company faces many challenges. Most of the regional markets are extremely competitive and this has become more evident following the consolidations among several large carriers.

The integration of Dobson Cellular/Cingular/AT&T Wireless, Sprint/Nextel merger, consolidation of Verizon Wireless/Alltel in January 2009 and AT&T s acquisition of Centennial Communications have resulted in Tier-1 carrier expansion into sparser geographical markets. As a result, U.S. Cellular continues to be susceptible to aggressive pricing by larger rivals.

Moreover, the company’s high-margin roaming revenues remain under pressure, which is particularly troublesome given its strong reliance on roaming fees. Our price target is $42.00, based on 28.4x our 2011 earnings estimate.

US CELLULAR (USM): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | Technology | Wireless Communications

RSS feeds: United States Cellular Corporation | USM | Technology | Wireless Communications |

Other Posts by | RSS Feed for this author