Dish Shares Dip After ‘Sell’ Rating

Stock falls 3.7% after Moffett says spectrum sale is ‘only’ positive path
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Dish stock fell nearly 4% Monday after MoffettNathanson principal and senior analyst Craig Moffett downgraded the shares to “sell,” adding in a note to clients that despite some recent signs of improvement, the only positive path for the satellite giant would be a sale of its wireless spectrum.

Dish stock was as low as $33.88 per share in early trading Aug. 13 (down $1.29 each or 3.7%) but rallied later to trade at $34.61 each, down 56 cents per share or 1.6%. The stock closed Aug. 13 at $35 each, down 17 cents or 0.5% per share.

Moffett, who also reduced his 12-month price target on the stock to $29 per share, placed a “sell” rating on the stock since June 2016, upgrading shares to “neutral” in March  of this year, after it appeared the stock had bottomed out after a series of declines.

Dish shares were down 30% in the first six months of this year, but gained some ground earlier this month after the company showed some improved subscriber metrics in Q2– its satellite net customer losses were less than the prior year and churn improved. That resulted in an almost 23% rise in the Dish’s share price between Aug. 2 and Aug.9.

Moffett acknowledged that Dish’s Q2 results were “genuinely better,” but added it may be short-lived.

Dish, Moffett noted, is “bewilderingly complex,” adding that while the company is moving ahead with plans to build out its wireless spectrum, there are a dizzying number of scenarios that could play out, including several different ways to build out the network, selling spectrum at high and low prices and potential regulatory wins and losses tied to that buildout.

“We further observed that all that complexity can be boiled down to one simple proposition: a spectrum sale (and at a price above which is already implied in Dish’s stock price) is the ONLY positive scenario for the stock,” Moffett wrote. “EVERY other scenario, including every variation on a network buildout, is a negative. Unfortunately, those ‘other’ scenarios have only gotten more likely.” 

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