2 Very Different Takes On DISH Network's Q4

DISH Network Corp DISH reported Q4 results on Monday. Revenue came in at $3.68 billion, below expectations of $3.7 billion. Earnings per share were $0.88, far above expectations of $0.43.

Two Wall Street analysts had very different takes on the company following the earnings release. Much of the discussion centered on monetizing spectrum, being acquired or making a wireless acquisition.

Analyst Todd Mitchell at Brean Capital rated the stock a Buy and raised the price target from $78 to $95. Mitchell, however, acknowledged that the Q4 results were “nothing to get excited about,” rather the focus was what DISH Chairman Charlie Ergen will do next.

Mitchell felt that it was “clear that Ergen has a plan for DISH, and new wireless services, that will not only revitalize DISH’s core residential business, but allow it to forge new market segments, upending the traditional MCVP model and the wireless business, by creating a new service that gets in front of changes in consumption.”

The next move included a “combination” with a wireless carrier, which would most likely be T-Mobile US Inc TMUS, according to Mitchell.

If DISH did not acquire T-Mobile, Mitchell thought that selling itself to Verizon Communications Inc. VZ and leasing spectrum to wireless companies were other possible scenarios.

At Wunderlich Securities, analyst Matthew Harrigan took a different perspective on the stock and maintained a Sell rating with a $67 price target.

Harrigan did not forecast a T-Mobile acquisition and the analyst suggested that AWS-3/4 spectrum had “much greater value” if owned by Verizon or AT&T Inc. T.

Harrigan’s price target was based on a shared network build assessment and a risk and time adjusted value “for 50 percent spectrum monetization and shared network build with no dampening from partial spectrum sale.”

The company’s plans represent a “long game for spectrum value realization” with “the first 40 percent build milestone for the already acquired AWS-4 spectrum” not coming until 2017, according to Harrigan. As a result, the firm remained “cautious” on the stock.

DISH Network recently traded at $78.29, up 1.1 percent.