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Based on lower visibility and dilution rising, UBS analysts downgraded Dish Network (NASDAQ:DISH) to Neutral from Buy and cut the firm’s price target on the stock to $10 from $27 per share in a note to clients on Monday.
The analysts explained that with sub losses continuing, wireless dilution ramping, and wireless M&A less likely in the near term, they are more cautious on DISH shares ahead of its funding needs in 2024.
“We now factor higher wireless dilution amid DISH’s entry into postpaid wireless in late ’23, while enterprise/wholesale 5G is taking longer to scale & the cyber incident (impacting call centers/online channels for weeks) adds pressure that is hard to quantify,” the analysts explained.
“We now look for ~$1.1B/$860M of wireless losses in ’23/’24E ($900M/$430M prior), which along w/ Pay TV declines, drives leverage to >10x by YE23E (6.8x at YE22),” they added.
UBS still believes DISH’s spectrum is undervalued but expects “rising leverage to limit equity appreciation pending visibility into improved wireless losses, sub traction and/or strategic optionality.”
