Shares of Leap Wireless International Inc. rose Monday after Raymond James upgraded the stock, saying the broader movement of consumers into low-cost "prepaid" service plans will benefit the company.
Leap shares were up 61 cents, or 3.7 percent, at $16.91 in midday trading.
This year, the wireless industry has seen a major shift among customers toward prepaid cell phone service, which generally costs less and doesn't require a long-term contract.
In a client note Monday, Raymond James analyst Ric Prentiss said he expects that trend to accelerate.
"This shift will benefit carriers like Leap, which can offer lower priced plans ... than its competitors," he wrote.
Prentiss said Leap is able to maintain its profit margins despite charging less for service because the company was built with an eye toward keeping costs low.
Prentiss raised his rating on Leap to "Outperform" from "Market Perform" and gave a share price target of $20.
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