Sprint shares jump after Citi upgrade

AP News
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Posted: Dec 09, 2009 3:21 PM

Shares of Sprint Nextel Corp. got a boost Wednesday after a Citi Investment Research analyst upgraded the telecommunications company and said its combination with T-Mobile USA in the next 12 months is more likely than not.

Analyst Michael Rollins upgraded Sprint to "Buy" from "Hold" and raised his target price on the stock to $5.50 from $5. He put the chance of a merger between Sprint and Deutsche Telekom-owned T-Mobile at 55 percent. In September, Rollins put the likelihood of such an acquisition at under 30 percent.

"We believe Sprint may reconsider its strategic options during the first-half of 2010, while it continues to improve its sales productivity and cut costs for which we expect additional programs to be announced during the first quarter," wrote Rollins in a note to investors Wednesday.

The analyst also expects Sprint to improve its losses of contract _ or "post-paid" subscribers _ over the next six months.

A Sprint representative could not immediately be reached for comment Wednesday afternoon.

Shares of the Overland Park, Kan.-based company rose 23 cents, or 5.9 percent, to $4.14 in afternoon trading. The stock has traded between $1.83 and $5.94 in the past 52 weeks.