Array Digital Infrastructure and Telephone & Data Systems: Buy-In Resolution the Catalyst for Further Value Unlock; Reiterate Overweight

Research evidence excerpt

J P M O R G A N

North America Equity Research

19 August 2026

Array Digital Infrastructure and

Telephone & Data Systems

Buy-In Resolution the Catalyst for Further Value Unlock;

Reiterate Overweight

We continue to like Array Digital (AD) and Telephone & Data Systems (TDS),

based on continued value-unlock at AD, including further spectrum sales and

potential wireless partnership monetization, as well as tower price discovery,

alongside an accelerating fiber build and improving broadband KPIs at TDS. As

visibility crystallizes on the timing of TDS’s offer to buy in the ~18% of AD shares

it does not own, we anticipate a pickup in potential catalysts, including a spectrum

sale and/or other asset monetization, and the resumption of TDS’s buyback. We

reiterate our Overweight ratings on AD and TDS and establish December 2027

price targets of $45 and $48, respectively (vs. Dec’26 targets of $54 and $51 prior).

TDS capital allocation and Array process. TDS reiterated its capital

allocation priorities: fiber investment, inorganic growth through M&A, and

returning capital to shareholders. On fiber, we like the deployment discipline,

with CFO Villacrez noting that the build cadence is not currently constrained

by capital, allowing TDS to accelerate in attractive first-to-fiber markets. On

M&A, the pending Granite State Communications acquisition adds ~11k fully

fibered addresses for $25m in markets contiguous to existing operations,

consistent with the clustering strategy; we do not anticipate large-scale fiber

deals, given management’s reiterated preference for small-to-medium-sized,

synergistic tuck-ins. On shareholder returns, both TDS and Array declined to

comment on TDS’s all-stock proposal to acquire the ~18% of Array it does not

own, while Array’s special committee of independent directors continues its

evaluation. We view consolidation as a simplification of the corporate structure

that could enable a REIT conversion over time, though it limits near-term

buybacks while the offer is outstanding. Given TDS’s balance sheet flexibility

and what we view as attractively valued shares, we see resolution of the AD

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