Shares in Dish Network Corp. surged this week after a Wall Street analyst upgraded the stock on the belief that its valuation represents a strong buying opportunity for investors.
Raymond James analyst Ric Prentiss in an Aug. 26 research report upgraded DISH shares to a "strong buy" from "market perform," with a $44 target price, saying he believes it is an "opportune" time to buy the stock no matter the final outcome for the T-Mobile US Inc./Sprint Corp. merger.
As part of its conditional approval of T-Mobile's pending merger with Sprint, the U.S. Department of Justice required the wireless carriers to divest myriad wireless assets, which DISH agreed to buy. The satellite TV provider will pay $1.4 billion for Sprint's prepaid businesses and $3.6 billion for 14 MHz of Sprint's low-band wireless spectrum, among other holdings. DISH plans to use these acquired assets to support its build-out of a next-generation 5G network. 5G is set to offer download speeds many times faster than the current 4G LTE wireless networks.
Yet more than a dozen state attorneys general have filed a lawsuit aimed at blocking the tie-up between T-Mobile and Sprint, saying the combination would lead to reduced access to affordable wireless services and higher prices.
"We like DISH whether it stays a PayTV-only operator with a significant 5G spectrum portfolio, adds 4G wireless operations based on the FCC/DOJ settlements when TMUS/S deal closes, or gets additional benefits from a settlement in TMUS/S vs. State AGs lawsuit," Prentiss wrote.
DISH shares closed Aug. 29 trading at $33.73, up 8.66% from its Aug. 23 close.
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Apple Inc. shares, meanwhile, rose slightly this week after the tech giant nailed down a date for its highly-anticipated September iPhone launch.
Apple said it will unveil a fresh slate of iPhones and other products on Sept. 10 at the company's headquarters in Cupertino, Calif., according to a Bloomberg News report citing an invitation sent to media.
Even as Apple remains embroiled in ongoing trade tensions between the U.S. and China, analysts said the company should be able to avoid passing along potential tariff costs to consumers with its new iPhones. But trade uncertainties could force Apple to start looking for production alternatives to China, which they said will be challenging.
J.P. Morgan tech hardware analyst Samik Chatterjee said in a recent research report that he expects Apple to avoid a bill-of-materials cost increase of between $30 and $50 with the September iPhone launch, allowing the company to absorb a large portion of any potential tariffs without raising prices for consumers. Chatterjee attributed the production cost savings to an industrywide decrease in prices for memory chip components that go into iPhones.
Another research report from Wedbush Securities technology analyst Daniel Ives on Aug. 23 noted that Trump recently delayed imposing his planned $300 billion of tariffs on certain Chinese goods, including Apple's cellphones and laptops, until Dec. 15. The tariffs previously had been set to take effect Sept. 1.
This "temporary reprieve" also will keep Apple from having to push any additional costs onto customers for the September iPhone launch, Ives said.
Apple stock closed Aug. 29 at $208.96 a share, up 3.12% from its Aug. 23 close.
Microsoft Corp. stock also rose after Ives at Wedbush suggested the company's booming cloud business could steal share from market leader Amazon.com Inc.
In an Aug. 29 research report, Ives said that he has recently seen a "clear acceleration" in Microsoft's cloud strategy and believes the company is poised to win the "lion's share" of the next phase of cloud growth.
"While [Amazon Web Services] remains the leader in cloud, we believe Microsoft is starting to clearly 'close the gap' as [the company] is seeing an acceleration of spending among enterprises around public/hybrid cloud deployments," Ives wrote.
During the June quarter, Microsoft's intelligent cloud segment represented the company's highest growth area, reaching revenue of $11.39 billion, up 19% year over year.
Microsoft shares closed Aug. 29 at $137.86, up 3.35% for the week.

