Nomura Weighs In on Sprint Corp (S) Following Softbank Deal to Acquire ARM Holdings
Sprint Corp (NYSE:S) could be facing an adverse climate reversal now that parent company Softbank Group has made its intentions to take hold of British multinational semiconductor/software design company ARM Holdings.
Nomura analyst Jeffrey Kvaal remains neutral on Sprint Corp stock, with his target price standing at $4.00. Kvaal worries that in Softbank CEO Masayoshi Son’s drive to buy the semi-design firm will cause a fissure in his time to be able to focus on Sprint; particularly considering there is not a huge correlation between the two companies.
Kvaal explains, “In our view, Mr. Son, who has been heavily involved in Sprint’s network design, may be stretched by this deal and the recent departure of his number two at Softbank, Nikesh Arora.” Without the fully devoted engagement of Son as a Chief Network Officer for Sprint, Sprint’s efficacy could suffer in its design plans.
However, Kvaal isn’t entirely bearish at this time, as he feels undergoing transactions of $7.3 billion for Supercell and a $10 billion deal for Alibaba will help gain back time to be able to focus on Sprint. With the positive force of CEO Marcelo Claure backing the Sprint team, the analyst feels Sprint still has a chance to succeed in its endeavors to sustain as well as develop a foundation of subscribers, even on tight, capped budget. Perhaps further indirect support will be possible following these disposal deals; even if Softbank has categorically denied additional financial aid for Sprint.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, Jeffrey Kvaal is ranked #432 out of 4,057 analysts. Kvaal maintains a success rate of 55% on his recommendations and realizes an average return of 9.4%.
TipRanks shows that out of the 10 analysts who rated Sprint Corp in the last 3 months, 2% indicated a Buy rating, 3% maintained a Hold rating, and the 5% of remaining analysts issued a Sell rating for S. The stock’s consensus target price stands at $3.89 with a nearly 14% decrease from where shares last traded.