SpaceX could initially target rural and suburban customers by acquiring Grain’s spectrum.
- Pivotal Research raised its SpaceX price target to $230 and maintained a ‘Buy’ rating, according to The Fly.
- Pivotal raised its price target after adding Starlink Mobile to its forecasts.
- Analysts expect Q3 revenue of $12.98 billion and earnings of $0.13 per share, according to Fiscal.ai.
SpaceX’s (SPCX) push into the U.S. telecom space has continued to find favor on Wall Street, with Pivotal Research raising its price target after the company agreed last week to acquire nationwide wireless spectrum from Grain Management.
Analyst Jeffrey Wlodarczak increased his price target to $230 from $220 and maintained a ‘Buy’ rating, implying roughly 41% upside from current levels.
Wlodarczak’s updated estimate is slightly above SPCX’s consensus 12-month price target of $221.07, according to Koyfin. Most of Wall Street is bullish on the stock, with 30 of the 38 analysts covering SPCX rating it a ‘Buy’ or ‘Strong Buy,’ five ‘Hold,’ and three ‘Sell.’
SPCX shares are up 0.6% in pre-market trading on Monday and have recorded gains in eight of the past 10 weeks.
Pivotal Sees Starlink Mobile Becoming A Low-Cost Wireless Carrier
According to Pivotal, SpaceX has effectively created a ‘legitimate’ new low-cost wireless carrier that could initially target rural and suburban customers, “bundled with the dish already on the roof.”
The brokerage added Starlink Mobile to its financial forecasts, which led to an increase in its price target.
SpaceX’s $8B Spectrum Deal Could Expand Starlink Mobile Coverage
Last week, SpaceX agreed to acquire Grain Management’s nationwide portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band for roughly $8 billion. These low-frequency airwaves travel farther and penetrate buildings more effectively, potentially adding ground coverage to its existing Starlink portfolio and offering broader mobile coverage.
The announcement rattled traditional U.S. wireless carriers. AT&T (T), Verizon (VZ) and T-Mobile (TMUS) shares dropped roughly 8.5% to 13.5% on Friday.
Wall Street Sees Opportunity, But Network Costs Remain A Risk
Wall Street analysts have been largely positive about the deal, seeing it as a major step toward expanding SpaceX’s wireless business, although building a competitive network could require significant investment.
JPMorgan said the acquisition strengthens the long-term growth potential of Starlink Mobile. However, the brokerage noted that SpaceX would likely need to build a ground-based network using large cell towers unless it reaches an agreement with an existing wireless carrier to use its infrastructure.
Goldman Sachs shared a similar view, expecting SpaceX to use the newly acquired 800 MHz spectrum through cell towers in major cities and urban areas to improve its mobile network coverage.
All Eyes On Q3 Earnings
Focus will now shift to SpaceX’s third-quarter (Q3) results as investors look for comments on AI spending, Starlink, and Starship, which recently completed a pivotal orbital trial, as the company looks to wind down operations using Falcon launchers to focus on the much larger Starships.
Analysts expect revenue of $12.98 billion and earnings of $0.13 per share, according to Fiscal.ai. In Q2, SpaceX reported a 92% surge in revenue to $7.81 billion, beating Wall Street’s $6.82 billion. Starlink revenue rose 67%, launch revenue increased 29%, while AI revenue surged 247%.
Retail Bulls Eye $250
Retail sentiment on Stocktwits surrounding SPCX turned ‘neutral’ from ‘bullish’ over the past 24 hours, amid ‘high’ message volumes.
One user expects the stock to rise to $200 following Flight 15 (Starship) trial run and $250 by Christmas. The trial could take place on November 8.
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The stock has gained more than 21% over its IPO price.
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