Dish Inks Multi-Year Agreement With Nexstar Media; Street Sees 59% Upside

Dish Network Corp. On Dec. 24 announced a multi-year carriage agreement with Nexstar Media Group.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

The agreement provides Dish (DISH) TV subscribers with a countrywide facility to tune in to Nexstar-owned programming, including news, entertainment and sports. Shares declined 1.4% at after-hours trading on Thursday.

Under the terms of the agreement, local stations and WGN America were immediately reinstated on Dish TV. Additionally, WGN America will be available on SLING TV in early 2021 as part of an extra add-on package.

The agreement was forged after Nexstar Media cut off local programming for nearly 5.4 million Dish subscribers on Dec. 2, rejecting a request to renew the contract between the companies.

Nexstar had allegedly asked Dish to pay high rates and imposed tariff increases onto customers. It allegedly demanded a hefty fee of $1 billion for stations that were available for free. Nexstar also allegedly forced Dish to add WGN America as part of the subscription, which had witnessed declining viewership in recent years.

On Dec. 17, Raymond James analyst Ric Prentiss reiterated a Buy rating on the stock but lowered the price target from $58 to $55 adjusting for the $2 billion convertible note offering announced on Dec. 15 with pricing announced on Dec. 17.

The offering would be utilized towards general corporate purposes including 5G network buildout costs.

The new price target still implies 77% upside potential. (See DISH stock analysis on TipRanks)

Overall, the rest of the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 3 Buys and 2 Holds. With shares, down 12.4% year-to-date, the average price target stands at $49.50 and implies an upside potential of 59.4% to current levels.