JPMorgan analyst Sebastiano Petti maintained an Overweight rating on United States Cellular ( USM ) and lowered the price forecast from $88 to $85.

The analyst says that he foresees additional opportunities to unlock value and anticipates substantial capital returns for shareholders within the next year.

The analyst notes the commencement of T-Mobile‘s exchange offer for up to $2.044 billion of US Cellular debt, which he believes indicates the deal’s imminent close in the coming weeks, as such offers typically precede closing within 40 days.

Consequently, Petti now expects T-Mobile’s acquisition of US Cellular’s wireless operations to finalize on July 1, aligning with expectations for a mid-2025 close.

The analyst now estimates that the company could distribute up to $28-$30 per share in special dividends by mid-2026.

This comprises of an estimated $9-$11 per share from the T-Mobile deal, an additional $10 per share following the sale of spectrum to AT&T, and $9 per share from the Verizon spectrum deal, says the analyst.

The analyst notes that USM continues its focus on cost optimization, but increased industry-wide competition is expected to impact its 2025 financials.

Petti raised the 2025 service revenue estimate to $2.95 billion (up 0.3%) due to higher postpaid ARPU, which is projected to grow 1.2% year-over-year to $52.44, despite anticipated lower volumes in postpaid, handset, and prepaid segments.

Conversely, the analyst lowered 2025 EBITDA estimate by 3% to $970 million, resulting in margins of 26.4% (down from 26.9%).

Although first-quarter capital spending was significantly below the expectations ($53 million versus $133 million prior), the analyst is only marginally trimming 2025 capital expenditure by 2% to $520 million.

Price Action: USM shares are down 0.76% at $62.80 at last check Wednesday.

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