Roth expects near-term pressure in AST from Starlink deal

Roth Capital says the EchoStar (SATS) “fire sale” continues with the company entering into an agreement to sell spectrum to Starlink for $17B. While Starlink will get incremental capacity for direct-to-device, its services will require next-generation satellites and a smartphone refresh, the analyst tells investors in a research note. Further, Roth believes the direct-to-device go-to-market continues to favor AST SpaceMobile (ASTS) with AT&T (T) and Verizon (VZ) relationships versus Starlink’s T-Mobile (TMUS) partnership. Nonetheless, the firm expects near-term pressure in AST shares from the EchoStar deal with Starlink, but thinks the agreement validates the company’s strategy and market opportunity. It believes AST’s long-term story is unchanged and keeps a Buy rating on the name with a $56 price target. The stock in morning trading is down 5% to $40.26.