MoffettNathanson Research has downgraded Dish to a "sell" recommendation, at a target price of $47 (it was trading Friday at close to $60 but down 3% in early trading Monday) after the news broke of AT&T's deal to buy Dish rival DirecTV for $48.5 billion plus debt.
The thinking is that with AT&T going for DirecTV, Dish's primary value is the spectrum it holds and has recently acquired that someone else might want, but that with more spectrum coming up for auction in the AWS-3 auction later this year, and the broadcast incentive auction next year, its spectrum is not a must-have and its valuation needs to be adjusted accordingly.
Analyst Craig Moffett suggests that any scenario other than selling its spectrum, like Dish buying T-Mobile or even a joint venture with Sprint, could not justify the satellite company's current value.
Dish has been on a spectrum hunt, most recently agreeing to buy the H Block spectrum at the FCC auction earlier this year for $1.564 billion.
MoffettNathanson is keeping its neutral rating on both AT&T and DirecTV.
