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Dish Network Will Likely Acquire Boost from T-Mobile on July 1

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Dish Network (NASDAQ:DISH) stock rose by nearly 1% in extended trading on Wednesday. The stock rose on reports that Dish Network will likely close on a deal with the new T-Mobile (NYSE:TMUS) on July 1. Recently, T-Mobile acquired Sprint. The company plans to sell Sprint’s Boost wireless business to Dish Network.

According to a CNET report, “Satellite TV provider Dish Network looks set to close its $5 billion deal with the new T-Mobile on July 1, according to a filing Wednesday with the SEC. Under the deal, which allowed for the $26.5 billion merger between T-Mobile and Sprint, Dish is acquiring Sprint’s prepaid mobile carrier Boost Mobile as well as Sprint’s 800MHz wireless spectrum to help it build a 5G network.” The report also said, “The T-Mobile-Sprint merger was only permitted by the Justice Department when Dish said it would acquire Sprint’s mobile assets to become a fourth carrier to compete with AT&T, Verizon and the new T-Mobile.”

Dish Network will likely pay nearly $1.4 billion for Boost and $3.6 billion for the wireless spectrum. The company will also gain access to the new T-Mobile wireless network through a seven-year MVNO agreement. This period gives the pay-TV operator time to build a standalone 5G network.

Growth projections for Dish Network

In the first quarter, Dish Network reported an adjusted EPS of $0.55 compared to $0.65 in the first quarter of 2019. The earnings missed analysts’ consensus estimate of $0.58 per share. Dish Network generated sales of $3.22 billion—a growth of 0.9% from the first quarter of 2019. The company beat analysts’ consensus sales estimate of $3.15 billion.

Dish Network reported net losses of 413,000 pay-TV customers in the first quarter—higher than its net losses of 259,000 in the first quarter of 2019. Analysts expected net losses of 222,000 pay-TV customers in the first quarter.

Wall Street analysts expect Dish Network to post sales of $3.1 billion in the second quarter. The figure would mark a fall of 3.4% YoY (year-over-year) compared to $3.2 billion in the second quarter of 2019. Also, analysts expect the company to post a non-GAAP EPS of $0.58 in the second quarter compared to $0.60 in the second quarter of 2019. Currently, analysts expect a 1.3% and 2.9% fall in the company’s 2020 and 2021 revenues, respectively. Meanwhile, they expect an adjusted EPS of $1.90 and $1.95 in 2020 and 2021, respectively.

Analysts’ recommendations and target price

Among the 20 analysts following Dish Network stock, ten recommend a “buy,” seven recommend a “hold,” and three recommend a “sell.” Wall Street analysts have a 12-month target price of $39.04 for Dish Network stock. Overall, the target price implies an upside potential of 10.6% compared to the stock’s closing price on Wednesday. The consensus target price for the stock has risen from $38.26 in May—a growth of 2.0%.

Earlier this month, Deutsche Bank increased its target price on DISH stock from $60 to $67. Suntrust Robinson also increased its target price on the stock from $23 to $30.

Stock returns

Dish Network stock rose 0.1% on Wednesday and ended the day at $35.29. At this closing price, the company’s market cap is $18.5 billion. Notably, the stock is trading 20.7% below its 52-week high of $44.48 and 106.5% above its 52-week low of $17.09. So far, the stock has fallen by around 0.5% year-to-date.

Based on the closing price on Wednesday, Dish Network stock was trading 7.7% above its 20-day moving average of $32.77. The stock is also trading 29.4% above its 50-day moving average of $27.28 and 22.8% above its 100-day moving average of $28.73. Dish Network’s 14-day relative strength index score is 65, which suggests that it’s near overbought levels.

Dish Network stock has a middle Bollinger Band level of $32.77, while its lower Bollinger Band level is $27.96. On Wednesday, the stock closed near its upper Bollinger Band level of $37.58, which indicates that it’s overbought.

On Wednesday, AT&T (NYSE:T) and T-Mobile stocks fell 1.7% and 0.3%, respectively. Meanwhile, the S&P 500 Index and the Dow Jones Industrial Average Index fell 0.4% and 0.7%, respectively.

To learn more, read Dish and T-Mobile Clash, Deal Deadline Gets Closer and Dish Shuffles Executive Team, Trades at a Double-Digit Discount.

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