Buy this stock that offers discounted exposure to SpaceX, Morgan Stanley says
Morgan Stanley initiated coverage of EchoStar with an overweight rating and $134 price target, citing a discount to its relationship with SpaceX. EchoStar shares have risen 27% over the past year but fell 17% since SpaceX's IPO. The bank sees an attractive entry point for exposure to SpaceX and spectrum assets. EchoStar could also benefit from a potential merger with DirecTV, according to the analyst.
How this was made
The 30-second read
Why it matters
Analyst coverage could spur modest buying pressure, but execution risk remains.
Market read
Analyst initiation may provide a short-term catalyst for EchoStar stock.
What to watch
Potential bankruptcy risk of certain assets and lack of imminent buybacks.
Background
Morgan Stanley analysts see EchoStar as a discounted way to gain exposure to SpaceX's spectrum assets.
Ticker impact
Morgan Stanley initiates coverage of EchoStar with a $134 price target, citing a 44% upside.
Potential short-term rally toward the $134 target.
Coverage initiation and price target provide a fresh catalyst, but the thesis is largely qualitative.
Market effects
May highlight satellite communications as a value play.
Limited to U.S. equity markets.
Low, confined to EchoStar investors.
Counterpoint
The discount may reflect underlying credit concerns and asset complexities.
Key entities
- CompanyEchoStar
Global provider of networking services and satellite communications.
- Research FirmMorgan Stanley
Investment bank initiating coverage with a bullish price target.
