Shares in Sprint Nextel Corp. rose 2.4 percent after Nomura Securities upgraded the stock, citing cost savings from the company’s network improvement plan.
Sprint climbed to $5.15, up 12 cents, at the close of trading on the New York Stock Exchange, bolstering a stock that had already more than doubled this year.
Earlier in the day, the stock was up more than 5 percent to $5.30.
Mike McCormack, a Nomura analyst in New York, raised his recommendation on the Overland Park company to buy from neutral in a report Monday.
He now expects Sprint’s shares to reach $7 over the next 12 months, up from a previous target of $2.50.
Sprint is making progress on its network upgrade, a project called Network Vision that should help lower operating expenses, McCormack said in the report. The effort may let the company boost margins on its service to the low 20 percent range, compared with about 16 percent today, he said. Competition in the industry also isn’t as tough as it has been, McCormack said.
“Sprint is taking the proper actions to improve margins and compete effectively,” he said. “Refreshed competitor wireless plans show that there is little appetite for aggressive price competition.”
The carrier was among a handful of regional stocks that enjoyed upbeat days in the market. YRC Worldwide gained 9 percent, while Garmin was up more than 3 percent and Cerner and O’Reilly Automotive were up more than 2 percent.
Sprint announced Monday about 100 communities where the company was working on LTE network expansion. The rollout includes New York, Los Angeles, Chicago, Philadelphia, Washington and Boston, as well as its hometown market
The nation’s third-largest wireless carrier didn’t give specific dates for when the LTE service will be officially started in each location. The list is designed to help customers understand the state of LTE service in a given area.
Sprint started LTE service in five cities in July. It remains well behind Verizon Wireless, which has more than 370 LTE cities, and AT&T Inc., with LTE service in 60 cities and plans to reach 100 markets by the end of the year.