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On Wednesday, BMO Capital Markets sustained their positive outlook on MDA Space Ltd (MDA:CN) (OTC: MDALF), with analyst Thanos Moschopoulos reasserting an Outperform rating and maintaining a price target of Cdn$33.00. The affirmation comes despite a recent decline in MDA’s stock value, which saw a 17% drop after the announcement that Apple (NASDAQ:AAPL) is backing SpaceX and T-Mobile’s emerging direct-to-device satellite service. The service, which is still in its beta phase and currently limited to text messaging, has been perceived as a potential threat to MDA’s market position.
Moschopoulos addressed the decline, stating that the market reaction to Apple’s involvement with SpaceX and T-Mobile was overstated. He highlighted that Apple’s recent $1.5 billion investment in Globalstar (NYSE:GSAT), made public in November, indicates a continued interest from the tech giant in developing its own satellite infrastructure. According to the analyst, this move by Apple does not affect MDA’s future, particularly with regards to the company’s financial forecasts for fiscal years 2025 and 2026.
The analyst’s commentary suggests confidence in MDA’s ongoing projects and future prospects, undeterred by the new satellite service collaboration between Apple, SpaceX, and T-Mobile. BMO’s reiteration of the Outperform rating and the C$33.00 price target reflects their expectation that MDA will continue to perform well and that the recent stock price decline does not reflect the company’s fundamental value or its long-term growth trajectory.
MDA Space Ltd, known for its expertise in space technology, has not seen any immediate impact on its operations or financial projections due to the recent news. The company’s stock price movement following the announcement of Apple’s support for a competing service has been deemed an overreaction by BMO Capital Markets.
In summary, BMO Capital Markets stands by MDA Space Ltd with a strong vote of confidence, signaling to investors that the company’s future financial performance is expected to remain robust despite the recent market turbulence and the entry of new players in the satellite services sector.
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