Street Calls of the Week
Investing.com - Deutsche Bank raised its price target on Echostar Holdings (NASDAQ:SATS) to $102.00 from $67.00 while maintaining a Buy rating following the company’s announcement of a spectrum sale to SpaceX. The stock, which has gained over 31% year-to-date and is trading near its 52-week high of $29.79, continues to show strong momentum according to InvestingPro data.
The price target increase primarily reflects Echostar’s announcement that it will sell its AWS-4 and H-Block licenses to SpaceX for $17 billion, to be paid 50% in cash and 50% in SpaceX equity. Deutsche Bank had not previously included any value for these spectrum assets in its earlier price target. InvestingPro subscribers can access detailed valuation metrics and 8 additional expert insights about Echostar’s growth potential through the comprehensive Pro Research Report.
The SpaceX transaction adds an estimated $14.4 billion ($42 per share) in after-tax spectrum value to Deutsche Bank’s price target calculation, partially offset by the removal of some tax losses associated with these bands.
Deutsche Bank expects Echostar to next announce a transaction to sell its AWS-3 spectrum, which the firm values at $9.9 billion, potentially packaged with 700 MHz spectrum (valued at approximately $750 million) and CBRS spectrum (valued at approximately $950 million).
Media reports have indicated that T-Mobile is in talks to lease terrestrial mobile rights from SpaceX, which Deutsche Bank suggests could help SpaceX defray the purchase price for satellite spectrum, estimated at $1.02 per MHzPOP.
In other recent news, AT&T has reiterated its financial guidance for 2025 and confirmed plans for $20 billion in share buybacks between 2025 and 2027. The company remains committed to its targets for growth in consolidated service revenue, adjusted EBITDA, and adjusted EPS, while maintaining its outlook for free cash flow and capital investment. In a significant development, AT&T’s acquisition of spectrum from EchoStar for $23 billion has led S&P Global Ratings to revise the company’s outlook to stable, citing an expected increase in leverage. Additionally, Bernstein SocGen Group has raised its price target for AT&T to $32 from $31, maintaining an Outperform rating on the stock. Goldman Sachs has upgraded AT&T to a Buy rating, highlighting strong growth prospects in fiber broadband, with expectations of mid-to-high teens growth for 2025. EchoStar’s announcement of selling its spectrum licenses to SpaceX for $17 billion has stirred concerns about increased competition in the telecommunications sector, impacting major players like AT&T. These developments come amid AT&T’s reported 18% fiber revenue growth in 2024, indicating robust performance in its broadband segment.
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