William Blair downgrades ViaSat on share rally, ramping competition

William Blair analyst Louie DiPalma downgraded ViaSat to Market Perform from Outperform without a price target. Following the stock’s 18% return versus the S&P 500’s 5% gain to start 2023, there is equal risk/reward, the analyst tells investors in a research note. The firm says ViaSat’s high leverage, capital spending and competition may offset the positive developments from Delta Airlines’ (DAL) February 1 rollout of free Wi-Fi. The launch of the first ViaSat-3 satellite and subsequent entry into service may not be enough to stem subscriber losses amid pressure from SpaceX’s Starlink, Blair contends. Further, Amazon (AMZN) is set to launch its own Kuiper-branded satellite service in the 2024/2025 time frame with aspirations to gain tens of millions of subscribers, the analyst notes. The firm says that while ViaSat is set to acquire Inmarsat in a $6B deal pending regulatory approval, "the merger presents risks."