Deutsche Bank Reaffirms a 'Buy' on DISH Network (DISH); Raises PT & Estimates

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DISH Hot Sheet

Rating Summary:
4 Buy, 5 Hold, 1 Sell

Rating Trend:

Up

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

Deutsche Bank reaffirms a Buy rating on DISH Network (Nasdaq: DISH), price target increased from $21 to $25.

Deutsche analyst says, "We believe DISH turnaround trends were clearly visible in 3Q09 results: surprisingly strong marketshare, low churn and margin pressure beginning to ease, while maintaining low SAC costs and generating very strong FCF. It is also becoming easier to see how DISH’s aggressive price promotions are flowing through, depressing ARPU and margins incrementally more each qtr this year, and how this could drive a rebound in ARPU and margins starting in 1Q10, possibly completing the turnaround in DISH’s metrics...Our subscriber forecast is proving embarrassingly low; we are raising ‘09E net adds by 314k to 371k and ‘10E by 280k to 350k. 2H09 is benefitting from artificially lower churn due to timing of promotional contract lengths (helps 4Q09 as well), but we believe that impact is mild compared to core operational improvements. We also reassessed ARPU trends given continued promos and found our 4Q estimate too high, though ‘10E was reasonable...We are raising our ‘09E by $139m to $952m (-9% Y/Y) but the 10-Q indicated higher ’10 satellite capex and launch spending and we lowered ‘10E by $150m accordingly, to $758m (-20% Y/Y). Of note, the SEC filings for DISH have often proven too conservative on satellite capex."

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DISH Network Corporation, through its subsidiaries, engages in subscription television business in the United States.