T-Mobile US Inc (NASDAQ:TMUS) shares edged higher on Monday after KeyBanc Capital Markets upgraded the stock, pointing to sustained business momentum and strong future prospects.
KeyBanc lifted its rating on the telecom group to “Overweight,” citing solid growth potential, improving profitability, and an attractive valuation relative to peers. The firm set a price target of $260, suggesting roughly 33% upside from current levels, and described T-Mobile as well positioned to maintain leadership across both mobile and broadband markets.
Analysts expect earnings growth to accelerate, with adjusted EBITDA projected to rise from around 5% growth in 2025 to approximately 8% by 2027. “We expect first-quarter 2026 results to be the initial catalyst, likely resulting in a beat and raise. While we acknowledge increased competition from Verizon and Starlink, we do not believe either will alter T-Mobile’s trajectory,” the note said.
The report also highlighted the company’s investments in digital platforms and artificial intelligence, which are expected to lift EBITDA by about $1.3 billion in 2026 and $2.7 billion in 2027 through higher digital engagement, reduced customer service costs, and greater operational efficiency. Margins are also forecast to expand meaningfully over the same period.
KeyBanc believes T-Mobile will continue to capture market share in both wireless and broadband segments, supported by network advantages and competitive pricing. The firm forecasts service revenue growth of 8.2% in 2026, with further gains expected into 2027.
Despite its performance, T-Mobile is currently trading at a discount to both its historical valuation and industry peers, which analysts see as offering downside protection. However, the company’s decision to stop reporting postpaid phone net additions—coinciding with Verizon intensifying efforts to grow its subscriber base—may signal a slowdown in this key metric, according to analysts.