A Dish Network Corp. field service specialist installs a satellite television system at a residence in Downey, California.
Patrick T. Fallon | Bloomberg | Getty Images
Dish rose nearly 4% on Monday after Raymond James upgraded the company to a strong buy, saying the stock is undervalued even if the proposed additions from the T-Mobile–Sprint merger don’t materialize.
As part of the merger agreement for T-Mobile and Sprint approved by the Department of Justice, Dish is set to buy prepaid mobile business assets and additional spectrum to become a wireless carrier. The merger still faces a lawsuit from states.
Raymond James analysts Ric Prentiss and Chase Donovan estimated that there is a 15% chance Dish is forced to continue business as usual, but that its existing wireless spectrum assets and television business still warrant a higher stock price.
The analysts said there is a stronger chance that the lawsuit from the states results in additional benefits for the company.
“We think it is an opportune time to buy DISH with the … merger saga hopefully wrapping up in the next 6 months, and the ramping of 5G network deployments by U.S. carriers needing multiple spectrum bands,” the analysts wrote in a client note on Monday morning.
Dish, which has seen its television subscriber base shrink as cord-cutting has gained popularity, has been buying spectrum in recent years for a potential move into the wireless space.
The analysts upgraded the company from market perform and set a price target of $44 per share for the stock, more than 30% above where it opened on Monday morning. Shares of Dish are up more than 28% this year but are well below highs of $44.66 per share reached in July.
Not every analyst shares the Raymond James’ view. MoffettNathanson downgraded Dish last month following the merger agreement.
