By Sam Boughedda
Morgan Stanley analysts told investors in a note Thursday that Deutsche Telekom (OTC:DTEGY) surpassing 50% ownership in T-Mobile US Inc (NASDAQ:TMUS) implies a strong more than $4 billion buyback pacing year-to-date.
"While DT already consolidates T-Mobile US given its >50% voting power, the company's direct ownership of 605.1mn shares now represents just over 50% of the 1,205mn shares outstanding as of March 31," explained the analysts.
"This quarter ending share count compares to 1,234mn at the end of 2022, indicating that T-Mobile has repurchased ~29mn shares so far in 2023, representing a 2.4% decrease. Assuming a $145 repurchase price, this implies ~$4.2bn in buybacks during 1Q23, which is above our $3bn estimate."
The analysts noted that the implied buyback pacing is above their estimate and indicates that the company ended the quarter with $6.8B remaining on its initial $14B authorization.
"This puts the company on track to potentially complete its initial program in August, which would be ahead of the September 30 official program end date. Investors will be focused on the size of the second repurchase program, and we currently estimate $18bn in buybacks from 4Q23-3Q24," wrote the analysts.