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SMALL BUSINESS
MetroPCS, Leap shares slip after Goldman downgrade
AP
NEW YORK -Shares of MetroPCS Communications Inc. and Leap Wireless International Inc. fell Tuesday, with Goldman Sachs predicting disappointing quarterly results.
Goldman analyst Jason Armstrong cut both stocks to "Neutral" from "Buy," telling investors in a note that competition for the wireless providers is on the rise.
He lowered his price target for Richardson, Texas-based MetroPCS to $7 from $14 and for San Diego, Calif.-based Leap to $16 from $26.
Among other competitive pressures, rival Sprint Nextel Corp. is having "a very strong quarter" with its Boost Mobile brand, Armstrong said, "while Leap and (MetroPCS) struggle."
Armstrong said that while both companies are still leaders in low-cost local wireless coverage, he underestimated the competition's willingness to accept lower profit margins to take some of their market share.
MetroPCS shares fell 37 cents, or 5.3 percent, to $6.63 in morning trading, while Leap was down 56 cents, or 4 percent, to $13.47.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-10-20 10:43:48
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