NEW YORK (AP) — The sell-off in shares of MetroPCS Communications Inc. on Tuesday prompted an upgrade of the stock from Deutsche Bank.
In a client note Wednesday, Deutsche Bank’s Brett Feldman said his estimates for the wireless provider’s average revenue per customer and earnings this year were already below average expectations.
And given that the wireless provider’s stock fell close to his $6 price target Tuesday, he upgraded the shares to “Hold” form “Sell.”
The drop in shares came after MetroPCS announced price cuts in its prepaid cellular plans, another indication of the intense competition in the wireless business. The stock closed down 84 cents, or 12 percent, to $6.35.
Nevertheless, Feldman said lower-cost plans should help MetroPCS win new customers. He raised his estimate for the company’s net customer additions in 2010 to 700,000 from 450,000.
Given the discount, he also lowered his estimate for average revenue per customer but said, “This did not materially impact our price target” for shares.
MetroPCS shares rose 10 cents to $6.45 in premarket trading.