T-Mobile Stock Looks to Snap Losing Streak After Upgrade

The equity may benefit from a shift in its options pits

Digital Content Manager
Mar 23, 2022 at 10:12 AM
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T-Mobile Us Inc (NASDAQ:TMUS) is attracting some positive analyst attention today. Keybanc upgraded the security to "overweight" from "sector weight," with a $155 price target, noting the telecom concern's cash flow potential, as well as its ability to expand margins. The analyst also said T-Mobile's 5G performance gives it a competitive edge against AT&T (T) and Verizon (VZ). At last check, TMUS is up 0.8% to trade at $126.69.

Keybanc joins an overwhelmingly bullish brokerage bunch. All but one of the 14 analysts in coverage call the stock a "buy" or better, while the 12-month consensus target price of $163.79 is a 30.3% premium to current levels.

An unwinding of pessimism in the options pits could fuel additional tailwinds for T-Mobile stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TMUS' 10-day put/call volume ratio of 3.42 stands higher than all but 1% of readings from the past year. This indicates puts have been picked up at a much quicker-than-usual pace.

That shift may be starting to take place, per today's options activity. Amid low absolute volume, 694 calls have been exchanged, or triple the intraday average, compared to 91 puts. Most popular is the 3/25 128-strike call, followed by the 126-strike call in the same weekly series, with positions being opened at both.

The $124 level seems to have recently emerged as an area of support for the security, after shares bounced off the 40-day moving average earlier this month. The $130 mark still lingers above as a potential ceiling, though today T-Mobile stock is looking to snap a three-day losing streak. Year-to-date, TMUS remains up 8.4%.


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