MetroPCS (NYSE:PCS) Upside Looks Weak Says Auriga

MetroPCS (NYSE:PCS) appears to have reached its upper level, according to Auriga, and they said they're going to the sidelines on the stock for now.

Auriga says, "PCS reported weaker than expected net additions for 4Q10 of 298K versus 393K consensus. However, churn was improved at 3.5% versus 3.8% in the previous quarter. We are choosing to move to the sidelines for three reasons. These weaker than expected net additions suggest increasing competition, especially from Leap Wireless (LEAP, Hold) which has recently begun to copy PCS's business model. Second, the stock has reached and slightly exceeded our $13 price target. Third, after raising EBITDA estimates multiple times over the past year, we do not believe there is material upside to our and consensus estimates for 2011 and 2012 (unless the sale of data phones exceeds our expectations)."

Auriga downgraded MetroPCS from "Buy" to "Hold." MetroPCS was trading at $12.94, down $0.36, or 2.74 percent, as of 1:36 PM EST. They have a price target on them of $13.