Bernstein Believes TMUS Stock Can Keeping Rising

T-Mobile stock is trying to break above the round $80 level

Oct 16, 2019 at 10:16 AM
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T-Mobile US Inc (NASDAQ:TMUS) stock has been on a steady climb higher in 2019, up more than 25% year-to-date to trade at $79.98, testing resistance at the $80 level. Meanwhile, brokerage firm Bernstein just released a note on the broader telecom, cable, and satellite sector, saying it has a positive outlook on the space, while giving TMUS stock in particular an "outperform" rating and $103 price target -- representing almost 30% upside from current levels.

Not only does this represent major upside for the shares and all-time-high territory, but it's also well above the average 12-month analyst price target of $88.17. So even with most brokerage firms handing out "strong buy" ratings on the security at the moment, there's still potential for more bull notes to come through in the form of price-target hikes.

Near-term options traders, though, are put-skewed at the moment, based on the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.43. This reading ranks in the 78th annual percentile, showing such a preference for short-term puts over calls is rare among T-Mobile speculators. But while peak front-month open interest is at the October 75 put, the most populated strike overall is the November 80 call.

Regardless, volatility expectations are muted at the moment, suggesting short-term options premiums are relatively cheap. For instance, our Schaeffer's Volatility Index (SVI) for the telecom concern is 24%, and ranks in the 14th annual percentile.

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