Telephone And Data Systems: Raymond James Raises PT to $50, Maintains Outperform

Telephone And Data Systems: Raymond James Raises PT to $50, Maintains Outperform

Raymond James has increased its price target for Telephone and Data Systems (TDS) to $50.00 from $49.00 while maintaining an "Outperform" rating. The adjustment follows TDS's second-quarter 2025 results, which included final details on the T-Mobile transaction and dividends, along with lower cash taxes benefiting from recent legislation [2].

The company's earnings per share (EPS) for the latest quarter were -$0.05, falling short of the forecasted $0.01, but TDS exceeded revenue expectations, reporting $1.19 billion compared to the anticipated $1.17 billion. Despite the revenue success, the EPS miss has drawn attention from investors [2].

Telephone and Data Systems is expected to benefit from its strong liquidity position, evidenced by a healthy current ratio of 1.74. The company's continued fiber build-out story remains "underappreciated" and offers greater upside potential, though it "requires more patience before potential capital returns" [2].

TDS's new CEO, Ken Dixon, has emphasized the company's focus on the tower and fiber businesses, with a significant transaction involving T-Mobile and the creation of Array Digital Infrastructure, Inc. The company has declared a $23.00 special dividend per share following the August 1 T-Mobile transaction close, payable August 19, with an additional estimated $18.69 per share in special dividends expected following the pending AT&T and Verizon spectrum sales [3].

Management has updated its 2025 guidance for TDS Telecom, projecting revenues in the range of $1.03 billion to $1.05 billion. Adjusted EBITDA is expected to be $320 million to $350 million, and adjusted OIBDA is expected to be $310 million to $340 million [3].

Analysts are keeping a close eye on TDS as more information becomes available, with a neutral to slightly positive sentiment towards the company's financial health and future prospects.

References:
[1] https://www.benzinga.com/markets/equities/25/08/47023630/owens-minor-telephone-and-data-systems-and-3-stocks-to-watch-heading-into-monday
[2] https://www.investing.com/news/analyst-ratings/telephone--data-systems-stock-price-target-raised-to-50-at-raymond-james-93CH-4184574
[3] https://seekingalpha.com/news/4483369-tds-outlines-1_03b-1_05b-revenue-target-and-23-share-special-dividend-following-uscellular