Barclays Downgrades DISH Stock Before Earnings

DISH Network earnings are due out after tonight's close

Jul 29, 2019 at 9:59 AM
facebook twitter linkedin

Last week, the Department of Justice (DoJ) gave its blessing to the Sprint (S)/T-Mobile (TMUS) merger after DISH Network Corp (NASDAQ:DISH) agreed to buy Sprint's prepaid wireless business and some of the telecom's wireless spectrum. However, Barclays doesn't think the deal will create "major upside" for DISH stakeholders, and downgraded the stock to "underweight" from "equal weight."

The brokerage firm maintained its $31 price target -- a 22% discount to Friday's close at $39.51, and well below the average 12-month price target of $48.24. Meanwhile, seven of 12 analysts maintained a "hold" or worse rating on DISH stock prior to today.

In reaction, DISH Network shares are down 2.5% to trade at $38.54, testing a recent foothold atop their rising 40-day moving average. The stock hit a 17-month high of $44.65 last Wednesday, July 24, and is still up 54% year-to-date.

Nevertheless, options traders have shown signs of skepticism toward DISH stock, too. The August 35 put has seen the biggest increase in open interest over the past two weeks, and data Trade-Alert points to buy-to-open activity here. If this is the case, speculators expect the equity to sink below $35 by August options expiration -- a time frame that includes DISH Network's earnings report, set for release after tonight's close.

DISH stock has closed higher the day after earnings in four of the past eight quarters, including a 4.4% gain in May and a 14.5% pop one year ago. The shares have averaged a 6.4% next-day move over the last two years, regardless of direction, with the options market pricing in a wider 12.5% swing for tomorrow's trading.



Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners