NEW YORK (The Street) -- Dish Network's (DISH) entry into the Web TV market, coupled with its command of the traditional broadcast spectrum market, are positioning it for future growth, a JPMorgan report says.
After a meeting the investment bank had Tuesday with Dish CEO Charlie Ergen, JPMorgan set its six-month price target for the Englewood, CO.-based satellite provider at $86 a share and its rating at overweight.
One key factor in the projection was Dish's Sling TV, a product meant to entice viewers away from traditional cable subscriptions. Rolled out in January, the service allows customers to stream any of 22 channels, including ESPN, for $20 per month. Sling also has add-on packages priced at $5 a month, and offers subscribers access to HBO for an additional $15 a month.
The potential for growth in that product, plus Dish's abundance of wireless spectrum, could create a winning combination when attracting customers.
"Dish argues, and we agree, that the current share price doesn't account for the potential growth in Sling video, instead focusing on the flat-down [Direct Broadcast Satellite] business which seems to be run more for cash than growth," JPMorgan analysts Philip Cusick and Eric Pan wrote in their report.
Despite its licensed ownership of key portions of the wireless spectrum, Ergen told JPMorgan his company doesn't have any plans to create its own wireless network. Instead, Dish described four options for the company's wireless presence -- partnerships with other companies, acquiring other companies, wholesaling its wireless capacity, or selling it in smaller pieces.
Ergen estimates Dish's spectrum portfolio is worth about $60 billion, according to the report. A JPMorgan estimate values the same holdings at $35 billion.