Dish cut to Hold at Benchmark after broad denials on any Amazon Prime wireless deal
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Benchmark downgraded Dish Network's (NASDAQ:DISH) stock to Hold from Buy and has a $7.30 price target.
Benchmark's analysts said last week's stock action on reports suggesting Dish could partner with Amazon (AMZN) to offer wireless to Prime customers at nominal pricing or free is indicative of Dish's network potential however the firm was highly skeptical of any immediate initiative even prior to denials from Amazon and the large MNOs.
According to a report, the online-retail giant had potentially held talks with Verizon Communications (VZ), T-Mobile US (TMUS) and Dish Network (DISH) to get the lowest possible wholesale prices. However, Amazon cautioned on the report that there were not any current plans in place, and T-Mobile also said it was not in talks to include its service in Prime.
The analysts said that fair value in the mid or high 30's is still tenable in their estimation through recovery of Dish's $30B+ spectrum investment, through successful commercialization via its cloud-based open RAN and VoNR network architecture.
Dish will satisfy FCC requirements for its 600 MHz licenses reaching 70% of the U.S. this month and is working to address liquidity concerns, including a $1B 2024 convertible maturity even as it cannot currently access the straight debt market at satisfactory rates despite being 'asset rich,' according to the analysts.
The firm noted that the company's management remains opaque on clarity related to addressing liquidity concerns, although it maintains it can back out of its $3.5B buy of Sprint spectrum from T-Mobile with only $72M in payments.
In addition, the analysts said that Dish's postpaid brand Boost Infinite has been delayed multiple times even as the company steps up marketing plans.
Dish, similar to other telecom and TMT companies worldwide, use AWS for cloud services, however Dish now does not have the national reach and demonstratable QoS to appeal to Amazon for an immediate Prime customer wireless offering. the firm added.
Dish would also lack the required ability to resell MVNO service from AT&T to offer national coverage, the analysts added.
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