Why United States Cellular Corporation Shares Soared Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of United States Cellular Corporation jumped 10% Monday after JPMorgan Chase upgraded the stock.
So what: Remember, U.S. Cellular stock plunged nearly 10% last Wednesday after the company turned in disappointing fourth-quarter results, thanks primarily to troubles converting to a new billing and operational support system which negatively affected churn.
However, JPMorgan analyst Philip Cusick thinks the worst of those issues have passed and so upgraded the stock to "overweight" from "neutral" and assigned a $76-per-share price target. To explain the change, Cusick suggested even though U.S. Cellular's first quarter results likely won't be pretty, he sees churn returning to normal by the end of Q2. By Q3, he says, it could see its first postpaid subscriber increase in over four years.
Now what: Even so, that doesn't exactly negate competitive disadvantages and pricing pressures U.S. Cellular is facing from goliath competitors like AT&T and Verizon right now. To be sure, that's a primary reason U.S. Cellular decided to forgo providing 2014 revenue and earnings guidance last week. In the end, whether U.S. Cellular stock appears underpriced now is little consolation for investors if it can't compete over the long term.
Consider the 9 high-yielding stocks in this free report
One of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend-paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
The article Why United States Cellular Corporation Shares Soared Today originally appeared on Fool.com.Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.