JPMorgan Upgrades ViaSat (VSAT) to Overweight, 'sell-off offers an attractive entry point'

October 17, 2023 2:05 AM EDT
Get Alerts VSAT Hot Sheet
Price: $18.49 -8.6%

Rating Summary:
    5 Buy, 10 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 26 | New: 20
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(Updated - October 17, 2023 4:22 AM EDT)

JPMorgan analyst Philip Cusick upgraded ViaSat (NASDAQ: VSAT) from Neutral to Overweight with a price target of $30.00 (from $35.00).

The analyst comments "We are lowering our December 2024 price target to $30 but upgrading VSAT to Overweight. $30 implies 6.2x our FY25 EBITDA vs. the stock today currently trading at 5.4x. Last week the company provided an update on its plans for the VS-3 F1 Satellite and confirmed that the company does not plan to construct a replacement. Instead, the next two Viasat-3 satellites (originally for EMEA and APAC, but possibly moving one to Americas) combined with existing infrastructure and agreements should provide ample capacity for Viasat’s planned growth, meaning that the expected $768m in insurance proceeds for VS-3F1 and (most likely) I6-F2 will likely be added to the company’s already large $1.96b cash balance (an effective cash total greater than today’s $2.44b market cap even after the September quarter burn ). The company is pulling forward the pace of synergy realization (we think there is potential for an upside discussion on the earnings call, if not an increase to the guide yet) and pulled forward the timing to FCF+ to 1H25. Viasat also reaffirmed its FY24 financial guidance and guided to EBITDA and Revenue growth in 2025, as well as provided an FY25 capex range of $1.4-1.5b, which supports our view that management is now focused on rationalizing capex spend and prioritizing a FCF inflection. VSAT shares have sold off ~56% since the 5/31 close of the Inmarsat deal vs SPX +~5%, and we believe the sell-off offers an attractive entry point with the stock now trading at 5.4x our FY25 EBITDA."

For an analyst ratings summary and ratings history on ViaSat click here. For more ratings news on ViaSat click here.

Shares of ViaSat closed at $19.69 yesterday.

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