Wall Street locks in Echo Star Communications (SATS.US) as the best replacement for SpaceX! Citibank and Deutsche Bank join hands to buy

The Zhitong Finance App learned that SpaceX (SPCX.US) may have finally opened its doors to open market investors, but Wall Street analysts said that compared to directly buying SpaceX shares, indirect investment in this space technology company through Echo Star Communications (SATS.US) is a lower cost method.

Citigroup analyst Michael Rollins restored research coverage of Echo Star Communications and gave it a “buy” rating and a target price of $126. He pointed out that in the next year, as SpaceX's stock price is expected to rise further, and Echo Star Communications's own business restructuring continues to advance, the company will benefit from this.

In a report to customers released on July 7, Rollins wrote, “We still believe that the company's continued promotion of spectral asset monetization, video business and potential sales of other assets, and the expected after-tax value from holding SpaceX shares in the future will create significant value.”

According to reports, Echo Star Communications owns Boost Mobile's mobile communications service and satellite TV operator Dish. In 2025, the company sold part of its spectrum license to SpaceX in exchange for shares of SpaceX that were not listed at the time. Echo Star Communications will also receive more SpaceX shares after the deal is expected to be completed in the second half of 2027.

Because it holds shares in SpaceX, Echo Star Communications is regarded by the market as a “shadow concept stock” of SpaceX. From the beginning of this year to the end of May when SpaceX submitted the S-1 listing application documents, the cumulative stock price of Echo Star Communications rose to a maximum of about 30%. However, since SpaceX completed a record public offering of $86 billion in June, Echo Star Communications's stock price has dropped by nearly 24%; in contrast, the newly listed SpaceX stock price is still about 13% higher than the IPO price.

Deutsche Bank analyst Brian Kraft also resumed research coverage of Echo Star Communications this week and gave it a “buy” rating and a target price of $143. In his latest report, he said that since SpaceX went public, there has been a clear divergence in the stock price performance of the two companies, which in turn has provided investors with an opportunity.

Kraft said that on a per-share basis, the value of SpaceX shares held by Echo Star Communications is about 20% higher than the current share price of Echo Star Communications. “This means that investors not only received almost all of Echo Star's remaining assets for free, but also bought SpaceX at a discount of around 20%,” he said.

Kraft added that this is particularly appealing to certain types of investors. He wrote, “For value funds, Echo Star Communications is probably a very good choice. This type of fund may have been unwilling to invest directly because SpaceX is an overvalued growth stock, but through Echo Star Communications, they can obtain relevant exposure at a more attractive price.”

This week, as the quiet period for IPOs came to an end, Wall Street banks began to cover SpaceX (SPCX.US) and reached a clear agreement — to buy the stock. According to the data, analysts' average target price is about $236, which means there is still room for growth of more than 55% compared to the current stock price.

The prospects for SpaceX's share price to rise will undoubtedly benefit Echo Star Communications, which holds shares in the company. In addition to holding shares in SpaceX, analysts believe that Echo Star Communications's remaining spectrum assets, as well as businesses such as Boost Mobile, Hughes, and Sling TV, also have potential to rise. In addition, Wall Street also believes that with the narrowing of the company's net asset value (NAV) discount, the resolution of lawsuits related to communication towers, and the gradual advancement of Dish DBS's bankruptcy and restructuring, there is room for further increase in Echo Star Communications's stock price.

David Baden, an analyst at New Street Research, said that even if Dish DBS filed for bankruptcy protection earlier this month, considering the SpaceX shares held by Echo Star Communications, the reasonable value of the company could still reach 165 US dollars per share. Baden wrote in the report: “At this level of discount, we think Echo Star Communications is an extremely attractive way to hold SpaceX shares indirectly.”