BTIG: T-Mobile commands 'most attractive relative valuation' in 2016, but Verizon remains market heavyweight

Analyst firm BTIG said it recently completed a new financial model for the U.S. wireless market that takes into account new smartphone payment plans as well as expected results from the FCC's planned incentive auction of TV broadcasters' 600 MHz spectrum. "Spoiler alert: T-Mobile comes out with the most attractive relative valuation to its peers," said BTIG analyst Walter Piecyk, "while Sprint's high debt leverage drives the most expensive relative valuation multiples."

The firm said it stripped out the wireline results for AT&T and Verizon, estimated the results of various phone payment and leasing plans, and projected carriers' cash flow and burn during 2016, including from buying spectrum in the incentive auction.

BTIG noted that Verizon leads in the market's overall "total enterprise value" with $337.8 billion in 2016, far ahead of AT&T ($289.4 billion), T-Mobile ($63.8 billion) and Sprint ($49.1 billion). But the firm said "it would take a relatively high valuation on the non-wireless businesses of AT&T and Verizon to bring them to parity with T-Mobile. T-Mobile trades at a discount even using a 7x wireline multiple for AT&T and Verizon." Post