Deutsche Bank upgrades AST SpaceMobile (ASTS.US) to "Buy": The impact of SpaceX spectrum deal may be misunderstood by the market.

According to Jinse Finance APP, AST SpaceMobile (ASTS.US) rose in pre-market trading after Deutsche Bank upgraded its rating on the communications stock from “Neutral” to “Buy”.

Analyst Bryan Kraft pointed out that the bank had downgraded the stock’s rating in May due to concerns over valuation, when the explosion at the New Glenn launch pad led to significant delays in ASTS’s launch plans. However, he now believes that the recent weakness in stock price, several positive developments and catalysts overlooked by the market, and the valuation of spectrum—estimated to account for all of ASTS’s enterprise value except for $10 per share—make this a good opportunity to adopt a more positive stance.

Kraft stated in the latest report: “We believe Friday’s 10% drop was a misinterpretation, as the 800 MHz spectrum SpaceX will acquire will not make SpaceX a more competitive D2D mobile network operator partner than ASTS, and ASTS is not targeting the direct-to-consumer market (SpaceX will primarily use the 800 MHz to serve this market).” He added: “We think it’s increasingly likely that T-Mobile will shift from Starlink to ASTS as its D2D partner (via a joint venture).”

As of press time, ASTS shares were up 3.6% in Monday’s pre-market, after falling 10.5% on Friday due to concerns over SpaceX’s spectrum.