U.S. Cellular Earnings: Efforts to Improve the Business Have Yet to Turn the Firm to Growth

Fourth-quarter U.S. Cellular results brought much of the same. We commend management for pulling out all the stops to improve its network and customer experience and find sources of growth outside the core mobile phone business. However, we believe the firm is fighting an unwinnable battle against bigger, better-funded competitors. The stock remains elevated on management's reiteration that it is exploring strategic alternatives, and we believe the firm's assets have value beyond what U.S. Cellular can extract by operating independently. However, on a stand-alone basis as a continuing operator, our fair value estimate is $25.