J.P. Morgan Sees EchoStar as Hidden SpaceX Play for Investors
A J.P. Morgan analyst says EchoStar is undervalued, citing its future SpaceX stake and spectrum deal potential.
EchoStar Corp. may be flying under the radar as a back-door investment in SpaceX, according to a J.P. Morgan analyst who contends the market is not fully pricing in the satellite company's assets and strategic opportunities.
The analyst argues that investors are undervaluing EchoStar on two key fronts: the anticipated stake the company is expected to hold in SpaceX and its capacity to forge additional spectrum licensing or sale agreements. Both factors, the analyst contends, represent meaningful upside that current share prices do not reflect.
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Spectrum rights have become an increasingly coveted resource as wireless carriers and satellite operators compete for bandwidth to support next-generation broadband and mobile services. EchoStar, which controls a significant portfolio of spectrum licenses accumulated over years of satellite broadcasting operations, sits in a position that could attract deal interest from multiple parties seeking to expand their wireless footprint.
The SpaceX dimension adds another layer of potential value. A future equity stake in the privately held rocket and satellite-internet giant — whose Starlink broadband unit has rapidly expanded its subscriber base — could represent a substantial asset on EchoStar's books if and when it is formally recognized or monetized by the market.
J.P. Morgan's bullish read on EchoStar suggests the stock could reward patient investors willing to look beyond near-term operating metrics and focus instead on the company's strategic assets. Whether the broader market comes around to that view may depend on how quickly any SpaceX or spectrum transactions materialize. Continue reading at MarketWatch.com
