Analysts Weigh in on Gogo After AT&T Announces Intent to Enter In-Flight Service Connectivity

A number of analyst issued their take on Gogo Inc.

after AT&T

announced on Monday that it intends to enter the in-flight connectivity market by the end of 2015. A more in depth look into AT&T's announcement can be found on the

. Despite a decrease of over 20 percent in Gogo share prices so far today, analyst ratings vary from underweight to overweight. Evercore analyst Jonathan Schildkraut is among those who believe Gogo provides a possible investment opportunity and has rated the company as Overweight with a $26 price target. Schildkraut notes that AT&T faces a list of near-term barriers to entry including "FCC approval of spectrum use for ATG" and the high cost for companies to switch ATG services. Based on these and other barriers, Schildkraut called AT&T's plan for implementation "rather ambitious". Similar to Schildkraut, UBS analyst John Hodulik has taken a more optimistic stance on Gogo by also setting a $26 price target for the company. However, Hodulik has placed a Neutral 12-month rating on Gogo. In his view, Gogo has the advantage of being a first-mover in the commercial aircraft market. Hodulik noted that Gogo currently has contracts with over 50 percent of commercial aircraft market. Looking to AT&T, Hodulik sees the company presenting potential competition in the business aviation market by 2016, which he calls the "hidden jewel" of Gogo. In addition to the above notes JP Morgan has Gogo rated as Overweight but has cut the price target from $28 to $23. Similar to both Schildkraut and Hodulik, JP Morgan analyst Philip Cusik mentioned "a number of challenges" faced by AT&T as well as the potential to present stiff competition to Gogo in the coming years. On the other end of the spectrum Morgan Stanley reiterated their Underweight rating for Gogo following the AT&T announcement.