The firm said it lowered its rating on the pay TV provider based on its belief the stock's upside is limited, in spite of the recent auction price.
"Incentives for entities involved in AWS auction are varied: DISH is incentivized to bid aggressively in the AWS auction given the importance to its equity," Barclays said. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"At the same time others who have been discussed as potential partners of DISH (like Verizon (VZ) ) have an incentive to acquire the spectrum in key markets even if they are interested in acquiring DISH in the future, in order to have more time to negotiate. Consequently, we believe it is not entirely fair to extrapolate an auction price for the spectrum held by DISH," the firm added.
The firm has a $64 price target on DISH stock.
Separately, TheStreet Ratings team rates DISH NETWORK CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DISH NETWORK CORP (DISH) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 58.46% to $635.52 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.28%.
- Compared to its closing price of one year ago, DISH's share price has jumped by 44.72%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Media industry and the overall market, DISH NETWORK CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- DISH NETWORK CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DISH NETWORK CORP increased its bottom line by earning $1.86 versus $1.50 in the prior year. For the next year, the market is expecting a contraction of 14.5% in earnings ($1.59 versus $1.86).
- You can view the full analysis from the report here: DISH Ratings Report