By Elsa Ohlen

T-Mobile stock, lackluster at best this year, has room to rise 15% as profit and cash flow gain steam in 2026, Wells Fargo says.

Analysts led by Eric Luebchow upgraded T-Mobile to Overweight from Equal Weight on Thursday, positioning it as their top pick among the wireless-network companies the bank covers.

Profit and cash flow will only accelerate in 2026 and beyond, and the stock's valuation looks attractive even though the shares trade at a premium to their peers, Luebchow said. He raised his price target on the shares to $260 from $250, implying a gain of 15% from Wednesday's closing price.

The stock is up 2.7% so far this year, while the S&P 500 index has risen 13%.

T-Mobile edged up 0.4% to $227.64 in early trading.

The company is strategically ahead of peers like Verizon Communications and AT&T with the broadest 5G coverage. It has upgraded over 85% of its macro cell towers, Luebchow said.

The company's lead in terms of its network should allow for market- share gains, particularly in underpenetrated segments like rural areas and the enterprise sector, Wells Fargo said. Growth in subscribers and service revenue should translate to better free cash flow per share than peers. That, in turn, sets it up well to initiate share buybacks or other acquisitions that may boost shareholder returns, Luebchow says.

About two-third of analysts covering T-Mobile rate the stock at Buy or the equivalent, according to FactSet. That compares with a 41% Buy-rating on Verizon and 55% on AT&T. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

Meanwhile, the analysts trimmed their price target on AT&T to $29 from $31, maintaining an Overweight rating. They said AT&T's recent $23 billion deal with EchoStar, which gives it the exclusive rights to a slice of the radio-frequency spectrum in specific areas, will dilute free cash flow in the near term, tilting their preference toward T-Mobile as a top pick.

They continue to rate Verizon at Equal Weight, setting a price target of $43, not far from its Thursday morning level of $40.38, saying the shares are likely to be range-bound until Daniel Schulman, the company's new CEO, spells out a strategic direction for the business. Verizon appointed Schulman to the job this month in an effort to shake up its operations and stop customers switching to its rivals.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 16, 2025 11:26 ET (15:26 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.