A Dish Network Corp. satellite dish
Daniel Acker/BloombergDish Network (DISH) is taking on the wireless industry, but with fewer than 10 million prepaid subscribers and what’s bound to be an expensive battle ahead, the strategy doesn’t seem sound, one analyst said.
Shares of Dish fell on Friday after Guggenheim analyst Mike McCormack downgraded it to Neutral from Buy and dropped it from the firm’s Best Ideas list. He also took away his $53 price target.
Dish shares are down about 1%, to around $36.83. They are up 3.8% this year compared to the S&P 500’s 14% gain.
McCormack said he does not see an upside to the shares as an operating company and he “can’t endorse” it taking on the wireless industry.
“While we had hoped asset value would have been realized through either a sale of spectrum, or a partnership with a deep-pocketed tech firm, those scenarios are seemingly becoming less likely,” McCormack said in a note.
Dish bought Boost Mobile in July for $1.4 billion, officially entering the retail wireless business with 9 million customers. Boost was previously owned by Sprint, and its sale was part of the Sprint-T-Mobile (TMUS) merger.
Last month, Dish CEO Erik Carlson said, “we continue to make good progress with our wireless network build.”
On a conference call with analysts last month, Carlson said “as we roll out our own network we will begin to benefit from owner economics that will drive profitability and allow us to be more disruptive and drive better competition in the retail wireless space.”
The company spent almost $50 million on its 5G network build-out in the third quarter. Dish said capital spending in the fourth quarter would be similar and increase substantially in the second half of next year as its 5G deployment ramps up.
Third-quarter profit of 86 cents per share beat the consensus of 63 cents on revenue of $4.5 billion.
The average rating of 18 analysts is a Hold, with a price target of $40.56, according to FactSet.
Write to Liz Moyer at liz.moyer@barrons.com
"dish" - Google News
December 05, 2020 at 12:06AM
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Dish Network Digs Deeper Into Wireless. Not Everyone Agrees It’s a Good Idea. - Barron's
"dish" - Google News
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