Dueling Analyst Recommendations: JPMorgan Downgrades Dish Stock to Neutral, Credit Suisse Upgrades to Outperform After 21% Drop Last Week
Shares of Dish Network (NASDAQ: DISH ) closed nearly 22% lower last week after the company reported a Q1 miss.
Dish reported a Q1 EPS of $0.68 to miss the analyst estimate of $0.74. Revenue for the quarter came in at $4.33 billion versus the consensus estimate of $4.38 billion.
Weaker-than-expected PayTV and wireless results prompted JPMorgan analyst Philip Cusick to downgrade to Neutral from Overweight with a $30.00 per share price target, down from $40.00.
“While we had remained skeptical on the long-term path to profit in wireless for Dish, we had been hopeful that pending market launches and an analyst day could clarify the path to a wireless business with real financial value that justified the underlying spectrum value. However, Friday’s call made clear that we should not expect financial forecasts at the meeting, and that market launches this quarter would be more “checking the box” for the FCC that the company could offer data services, than a real commercial launch,” Cusick said in a client note.
Despite a meaningful drop on Friday, the analyst continues to see “little path for investor excitement as long as wireless investment is ramping with no forecasts to a destination, and the company needs to raise additional capital.”
Moreover, Cusick is pessimistic that the company can “create a differentiated 5G network experience that enterprises (or others looking to deploy private networks) need to use, without which the company’s massive spectrum holdings seem unlikely to be reflected in shares.”
On the other hand, Credit Suisse analyst Douglas Mitchelson upgraded shares to Outperform with a $45.00 per share price target.
Contrary to Cusick, Mitchelson sees the upcoming Analyst Day (tomorrow, May 10) as a “major catalyst” in the context of the Q2 2022 5G network launch.
The analyst says that “the opportunity to invest in DISH’s greenfield Cloud O-RAN 5G wireless network, backed by more sub-6 GHz spectrum than market leader Verizon (NYSE: VZ ) had been using until just recently, at an equity value equal to half a year of AT&T (NYSE: T ) capex or one-fifth of the cost for Verizon to buy & build C-Band, is too good for investors to pass up.”
Overall, the Credit Suisse analyst sees “deep value” in DISH shares.
DISH stock price is down 1.5% in pre-open Monday.
By Senad Karaahmetovic
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