EchoStar price target raised to $28 from $10 at Deutsche Bank

Deutsche Bank analyst Bryan Kraft raised the firm’s price target on EchoStar to $28 from $10 and keeps a Buy rating on the shares. The company yesterday announced a reorganization of its capital structure yesterday, which moved unencumbered spectrum, cash generative subscribers, and the company’s term loan A from restricted to unrestricted subsidiaries, the analyst tells investors in a research note. The firm says this essentially gives EchoStar more flexibility and options to borrow, meet maturity obligations, invest in the business, move liquidity around the capital structure, and potentially swap for existing bonds at a discount. All of this means a transfer in risk and, therefore, value between restricted bondholders and equity holders, which drove the stock up 30% yesterday, Deutsche explains. It sees this as only the first move by EchoStar to address its over-leveraged balance sheet.