Analysts are once again complaining that Sprint Nextel stock is undervalued. Banc of America Securities analyst David Barden said investors are undervaluing the stock and overstating Sprint's churn problems. Banc of America maintained a "buy" rating on Sprint as well as a price target of $29. On Tuesday, Standard & Poor's Equity Research raised its rating on Sprint to "strong buy" from "hold," citing a more favorable valuation for the telecom giant's shares. "We think Sprint, a pure play wireless carrier, will grow faster than RBOCs," said S&P analyst Kenneth Leon. "We think the shares are attractive, priced near peers, but Sprint should grow faster." S&P has a $26 price target on the stock.
Interestingly, excitement among investors over AT&T's acquisition of BellSouth earlier this year spilled over to a number of telecom companies, but not Sprint. The company's stock has hovered around the $20 range since the beginning of the year with a 52-week high of $27.20. Sprint has always been in the shadows of fellow CDMA competitor Verizon Wireless, but now stock analysts are asking investors to take a closer look as it makes some innovative content deals and beefs up the EV-DO network.