We upgrade our recommendation on DISH Network Corp. (DISH) to Neutral. We believe that the stock is currently fairly valued as it has moved up more than 63% in the last year. DISH currently has a Zacks Rank #3 (Hold).
Why the Upgrade?
We believe that better pay-TV services, dishNET satellite broadband services and strong customer faith will help the company to improve its financial condition. Business fundamentals remain intriguing. DISH is gradually improving its technically superior hardware, the latest of which is the “Hooper” HD DVR set.
The Federal Communications Commission has allowed DISH to deploy a nationwide wireless network with some restrictive conditions. The company is trying to become a unique bundled service provider of wireless voice and data together with a strong video distribution network.
On the other hand, in Jun 2013, DISH suffered two setbacks with respect to its plan of entering the U.S. wireless market. First, the company decided not to pursue the acquisition of Sprint Nextel Corp. (S).
Second, DISH withdrew its offer to acquire the remaining 49% stake of the wireless wholesaler, Clearwire Corp. (CLWR). The deployment of a nationwide wireless network is a very expensive and time consuming affair. DISH is yet to declare its final stand regarding its portfolio of airwaves.
Meanwhile, DISH is looking for several options to utilize its sizeable storage of wireless spectrums. In May 2013, the company executed a Letter of Intent with regional wireless network operator, NTELOS Holdings Corp. (NTLS).
The two companies will deploy a fixed-mobile broadband network to offer high-speed Internet service to areas served by NTELOS. Accordingly, on Jun 17, 2013, the two entities jointly launched broadband services across rural Virginia by utilizing 2.5 GHz band of airwaves.
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