Shares of satellite startup AST SpaceMobile have rebounded strongly, retracing losses following President-elect Donald Trump’s recent victory. The Texas-based company is considered a challenger to Musk’s SpaceX, which produces Starlink satellites. AST SpaceMobile says it is building “the first and only space-based cellular broadband network.” Earlier this year, it launched five satellites in partnership with telecommunications giant AT&T and plans to launch 17 more satellites early next year. These will add to the 150 goals set for this decade as it looks to achieve full global connectivity. However, the startup’s shares fell about 10% in the two days after the U.S. election as investors worried that the company might be disadvantaged by Musk’s close relationship with the new U.S. administration. SpaceX CEO Musk has strongly supported Trump and participated in the Republican campaign in the past few months. ASTS 1Y Line Scotiabank analysts say Musk’s political alliance could benefit SpaceX’s efforts to obtain a key regulatory exemption from the Federal Communications Commission (FCC) to operate its direct-to-cell (DTC) satellites, allowing it to more directly to compete with ASTS. DTC satellites enable text messages, calls and Internet connections from anywhere in the world via mobile phones. “Without the exemption, Starlink’s DTC satellites will not be able to operate at full power,” Scotiabank analysts Andres Coello and Leonardo Curtidor said in a note to clients on Nov. 6. Analysts at the investment bank believe this will benefit AST. SpaceMobile because the company has “superior technology” that allows it to comply with existing FCC regulations. The investment bank has a $45.90 price target on the stock, which suggests 90% upside potential. “David Battle with Goliath” Deutsche Bank analysts are also optimistic about AST SpaceMobile, raising their September target price to $63. This currently represents an upside of 154%. However, analysts say that if AST SpaceMobile is to succeed, it will have to move quickly to gain market share, as Musk’s SpaceX is likely to be just months late in launching a competing service. “ASTS likely has a few precious months to establish sustained coverage in the U.S. before SpaceX is granted a waiver,” Scotiabank’s Coello and Curtidor said. “This is a David and Goliath battle; we believe ASTS’s superior technology will win.” Four analysts polled by FactSet agreed on a 65% upside price target for ASTS. —CNBC’s Michael Bloom contributed reporting.
This SpaceX rival’s stock rebounds after election, and analysts like it | Real Time Headlines
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