What To Know About Verizon's Dish Spectrum Connection - Verizon Communications (NYSE:VZ), DISH Network Corp Cl A (NASDAQ:DISH)

In a report rolled out Friday, Wunderlich analyst Matthew Harrigan looks into DISH Network Corp DISH after Thursday’s 4.6 percent rally.

The firm maintains a Sell rating and $48.00 price target on the stock.

Shares of Dish are falling on Friday trading.

According to a recent Wunderlich research note, the firm maintains a Sell rating and $48.00 price target on shares of Dish, as its experts believe Thursday’s 4.6 percent price surge represented an exaggeratedly bullish reaction to Verizon Communications Inc. VZ CEO Lowell McAdam's “rather sanguine Goldman Sachs Communacopia comments.”

'Non-Starter'
McAdam specifically restated that securing Dish's AWS spectrum by purchasing the cable service's provider is “a non-starter. The note added, “He did suggest that Verizon would be amenable to discussing commercial terms on providing megabytes of network capacity with offsetting access to DISH's spectrum but this does not necessarily imply any out-size windfall.”
Related Link: Dish Network Is Getting Hamstrung
The analysts expect integrated telecom services provider to remain vigilant in view of Dish's “litigiousness and potential disruptive behavior.”
Nonetheless, they added, McAdam's tone was “gentler than the usual admonitions relating to DISH manipulating the January AWS-3 auction and not using spectrum.”

Sell Thesis

The report highlighted five key points to Wunderlich’s Sell thesis:

McAdam’s declarations suggest he is satisfied with the progress seen in Verizon’s network and thinks the company does not need access to Dish's spectrum immediately.

On top of Verizon’s $10 billion AWS-3 acquisition, McAdam suggested that small-cell technologies are substantially relieving the on network capacity even as the company “continues to dominate RootMetrics network quality results.”

On Thursday, “DISH did get extra time (to October 1) to submit payment or a credit letter for the discount relating to the AWS-3 spectrum that DISH's Designated Entities (DEs) won in January. “

“More prosaically relative to deal gamesmanship, DISH is making good progress with the 3GPP (3rd Generation Partnership Project).”

“Reach $35+ billion valuations for DISH's 81Mhz national average of (virgin) spectrum have to be sanely compared to the $56.9 billion and $50.5 billion current enterprise values for T-Mobile and Sprint.”

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