Echostar, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Rollins from Citi maintained a Hold rating on the stock and has a $85.00 price target.
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Michael Rollins has given his Hold rating due to a combination of factors related to Echostar’s strategic decisions and market conditions. The recent transactions involving the sale of spectrum assets to SpaceX have been incorporated into the valuation model, leading to an increased target price. However, the potential decommissioning of Echostar’s 5G network and the elevated debt levels of its subsidiaries present significant challenges.
Rollins also notes the strategic option value of the remaining spectrum, particularly the AWS-3 paired, which holds potential interest for mobile competitors. Despite these opportunities, the risks associated with increased competition from SpaceX/Starlink in the broadband market, especially in rural areas, contribute to maintaining a Neutral/High Risk view. The potential for a merger or sale involving DISH and DTV is also considered, but the financial hurdles remain substantial.
In another report released on September 9, Morgan Stanley also maintained a Hold rating on the stock with a $91.00 price target.