Shares of Dish Network Corp. extended their rally on Friday to end with their best performance in nearly two years as the telecommunications company won over a former Wall Street skeptic.
JP Morgan’s Philip Cusick raised his rating on Dish’s DISH stock,
up two notches, from overweight to underweight, writing that while the company still faces challenges, Dish’s broad spectrum holdings are creating a floor under the stock.
“With shares significantly weaker, from here we see an improved value proposition as well as some positive data points ahead improving sentiment on Dish shares, which appear oversold relative to the underlying value. spectrum, although we recognize potential execution challenges, including the risk of further delay to the Las Vegas commercial launch, business model issues and financing risks,” he wrote in a memo to customers Friday morning.
Shares of Dish rose 11.3% in Friday’s session, delivering their biggest single-day percentage gain since March 24, 2020, when they rose 14.3%. The jump was based on a 6.9% rally in Thursday’s session after the company’s fourth quarter earnings report.
See more: Dish Network earnings match consensus for fourth quarter while revenue is slightly lower
The company is committed to rolling out 5G that will be able to serve 20% of the U.S. population by June 2022, Dish noted in its 10-K filing. Known for its satellite TV business, Dish has been striving to grow a wireless operation since acquiring prepaid brands from Sprint and T-Mobile US Inc. TMUS,
as part of the 2020 merger of these two telecommunications companies.
“We have long anticipated potential delays given the new network and architecture, which we believe Dish was aware of, but we still expect Dish to meet its (interim) June 2022 construction requirement of 20% of American POPs, with the company targeting 27 major metros for this milestone,” Cusick wrote.
Dish also pledged to be able to serve 70% of the US population with 5G by June 2023, according to the filing.
“Note that we still wouldn’t be surprised to see Dish request an extension due to COVID-19 and supply chain issues, but believe this is better integrated into today’s pricing than summer’s. last,” Cusick commented.
He is optimistic about the company’s 5G commercial launch in Las Vegas and its planned analyst day in May.
Cusick lowered his price target on Dish shares to $40 from $42 in conjunction with the double upgrade.
Stocks have lost 20% since early November as the S&P 500 SPX,