BTIG Lifts PT on Dish Network (DISH) to $90 Ahead of FCC Incentive Auction Completion
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BTIG lifts its price target on Buy-rated Dish Network (Nasdaq: DISH) from $85 to $90 ahead of FCC incentive auction end.
Analyst Walter Piecyk commented today:
We continue to believe Dish offers a valuable strategic asset for wireless operators because of its deep spectrum ownership. Dish amassed the vast majority of its spectrum at discount prices well before the impact that LTE adoption had on wireless data growth and mid-band spectrum values, which culminated in the $45 billion AWS-3 auction last year. That value accretion was not only a result of good timing, but also hard work by Dish to manage through a challenging regulatory process that converted spectrum that could only be used by satellites to an asset that could be deployed using LTE technology in terrestrial wireless networks. Dish’s spectrum value was further enhanced by working with standards committees to include it in the LTE ecosystem. We increased our target to $90 from $85 based on a revised valuation framework that looks at these assets based on their new 3GPP bands and using new 2017 estimates to value the core business.
We have written plenty on spectrum values, the FCC’s incentive auction and the events that impact Dish, but we had not updated our valuation framework for some time. As we approach the end of the incentive auction within the next few months, we figured it was a good time to do so. The next auction data point is expected in two weeks, when the reverse auction should conclude for Stage 3. We have provided updates on auction implications and the apparent lack of material participation by Verizon, which we will not rehash here. (Link, Link) Our recently revised timeline sets an auction conclusion in Q1 2017, which could mark the beginning of strategic discussions that have been under wraps since February 10, 2016. That’s a long time that investors will be happy to have behind them.
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