ViaSat stock rises on Deutsche Bank upgrade

Investing.com -- Shares of ViaSat Inc. (NASDAQ:VSAT) climbed 4.5% following an upgrade by Deutsche Bank (ETR:DBKGn) analyst Edison Yu from a Hold to a Buy rating, with a revised price target set from $13.00 to $15.00. Yu’s optimism is grounded in the potential for ViaSat to enhance its equity value through strategic asset sales and successful satellite launches, despite competition from Starlink in the communications services sector.

In his analysis, Yu acknowledged the long-term pressures Viasat may face from Starlink, but highlighted several opportunities for the company to increase its equity value. The suggested strategies include the sale of its L-band spectrum and DAT hardware business, as well as the indirect benefits of deploying two major satellites. These moves could significantly reduce the company’s debt and improve its risk/reward profile.

Yu estimates that it could take between 12 to 18 months for these strategies to fully materialize. He believes that at the current levels, the potential rewards for investors are becoming increasingly compelling.

Yu said, "While we still have concerns about Viasat’s core communications services business longer-term in the context of pressure from Starlink, we see multiple paths for the company to create equity value by materially deleveraging its balance sheet through asset monetization, these include its L-band spectrum, DAT hardware business, and indirectly through the successful deployment of two major satellites."

Investors appear to be responding positively to the analyst’s upgraded outlook, reflecting confidence in ViaSat’s ability to navigate the challenges and capitalize on the identified opportunities to strengthen its financial position and market standing. The move by Deutsche Bank provides a notable endorsement of ViaSat’s potential strategies and future prospects in a competitive industry.

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