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Investing.com - Barclays downgraded Viasat (NASDAQ:VSAT) from Equalweight to Underweight while raising its price target to $23.00 from $10.00, citing uncertainty around a potential company breakup. According to InvestingPro data, the stock appears overvalued at current levels, despite its impressive 244% gain year-to-date.
The research firm introduced a new breakup valuation that considers the potential sale of Viasat’s DAT business, a move that activist shareholder Caronnade has advocated for. Barclays estimates a potential upside valuation of $36 per share in a breakup scenario, though this falls "materially below" Caronnade’s valuation. The company’s strong liquidity position, with a current ratio of 2.11, could support such strategic moves.
The new $23 price target represents a probability-weighted average between Viasat’s stand-alone valuation of $15 per share (which now includes a $500 million payment from Ligado) and a potential DAT business sale at 15 times EV/EBITDA for 2026.
Barclays noted the current trading price of $29 per share exceeds their target, prompting the downgrade despite the higher price target. The firm also updated its revenue and adjusted EBITDA estimates following Viasat’s first-quarter 2026 results.
The analysts expressed concern about "limited growth" in Viasat’s satellite business due to increasing competition in the sector.
In other recent news, Viasat Inc. shareholders approved amendments to the company’s 1996 Equity Participation Plan and Employee Stock Purchase Plan at their annual meeting. The changes include setting the number of shares available for future issuance at 6,410,000 and extending the period for granting incentive stock options by one year to 2035. In analyst updates, William Blair reiterated an Outperform rating for Viasat, noting potential value in its spectrum holdings following AT&T’s $23 billion spectrum acquisition from EchoStar. In other developments, Viasat announced the upcoming retirement of James Dodd, the company’s Senior Vice President and President of Commercial Services, effective around November 1, 2025. Dodd will remain as a non-executive employee until December 31, 2025, aligning with his severance agreement. Meanwhile, Pulsar International plans to deploy Inmarsat Maritime’s NexusWave connectivity solution across more than 300 vessels over the next 12 months. The rollout is part of an expanded partnership with Inmarsat Maritime, a Viasat company. Raymond James reaffirmed its view that satellite direct-to-device technology is not a competitive threat to wireless networks and tower companies, emphasizing its role as a complementary service.
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