BofA Securities Reiterates ‘Neutral’ Rating on T-Mobile (TMUS)

T-Mobile US Inc. (NASDAQ:TMUS) is one of the 10 best defensive stocks to buy in a volatile market. On July 7, BofA securities reinstated coverage of the stock with a ‘Neutral’ rating and a $255 price target. The Neutral stance comes amid concerns about the stock’s premium valuation as it trades at a price-to-earnings multiple of 23.

BofA Securities Reiterates ‘Neutral’ Rating on T-Mobile (TMUS)

In addition, BofA remains wary about the company’s high institutional ownership and record-high growth forecasts, which hint at limited upside potential. Nevertheless, the research firm has affirmed T-Mobile’s industry leadership in postpaid phone net ads amid revenue and EBITDA growth.

The communication services company is also in a solid financial position with $31.6 billion in EBITDA and 5.3% revenue growth over the last 12 months. BofA believes T Mobile is in a position to follow other cable companies with more competitive pricing and promotional offers to strengthen its edge in the industry.

While we acknowledge the potential of TMUS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TMUS and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.