TDS: Future Gains Will Hinge On Completing Pending Spectrum Sales

Analysts increased their price target on Telephone and Data Systems to $48.67 per share from $45.00, citing the company’s strategic transformation through the sale of its wireless operations and spectrum assets, as well as the potential for further value creation once pending spectrum transactions are completed.

Analyst Commentary

Bullish Takeaways

• Bullish analysts highlight that the completed sale of wireless operations to T Mobile simplifies the business model and allows management to focus capital on higher return segments, supporting a higher valuation multiple.
• They view the ongoing divestiture of spectrum assets as a key catalyst, with proceeds expected to strengthen the balance sheet and create optionality for shareholder returns or targeted reinvestment.
• Positive steps in the portfolio transformation are seen as reducing execution risk over time, improving visibility into cash flows and justifying price targets above prior levels.
• Completion of pending spectrum transactions is expected to unlock additional embedded value, which bullish analysts see as underappreciated in the current share price.

Bearish Takeaways

• Bearish analysts caution that the company’s future growth profile may be more limited without wireless operations, placing greater pressure on management to find new avenues for expansion.
• They see execution risk around closing remaining spectrum sales, noting that delays or weaker than expected pricing could temper the upside embedded in current valuation assumptions.
• There is concern that capital allocation decisions following asset sales, including the mix between debt reduction, buybacks, and reinvestment, could dilute potential value creation if not well disciplined.
• Some remain wary that the market may have already priced in a significant portion of the transformation benefits, which could limit near term multiple expansion if operating results do not quickly improve.

What's in the News

• Increased equity buyback authorization by $500 million on November 7, 2025, bringing the total plan authorization to $750 million (company announcement, Key Developments).
• Repurchased 1,512,486 shares, or 1.32 percent of shares outstanding, for $58.33 million between July 1, 2025 and October 31, 2025 under its ongoing buyback program (Key Developments).
• Completed cumulative repurchases of 8,087,614 shares, or 7.17 percent of shares outstanding, totaling $176.3 million under the buyback program launched on August 2, 2013 (Key Developments).

Valuation Changes

• Fair Value Estimate remains unchanged at approximately $48.67 per share, reflecting a stable long term outlook despite recent portfolio changes.
• Discount Rate edged down slightly from 6.96 percent to 6.96 percent, indicating a marginally lower perceived risk profile.
• Revenue Growth remains effectively unchanged at around negative 50.82 percent, continuing to reflect the impact of divested wireless operations on top line comparisons.
• Net Profit Margin is essentially flat at roughly 25.55 percent, suggesting stable long term profitability expectations.
• Future P/E holds steady at about 48.37 times, signaling that the valuation multiple embedded in the model is largely unchanged.