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Deutsche Bank cuts AST Spacemobile stock target, maintains buy rating By Investing.com

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On Tuesday, Deutsche Bank adjusted its outlook on AST Spacemobile (NASDAQ:ASTS), a company specializing in space-based cellular broadband network services. The firm’s analyst has revised the stock price target downward to $19 from the previous $23, while still recommending the stock as a Buy.

This change in valuation reflects a series of recent developments within the company, including its financing activities and commercial agreements.

The analyst’s statement elaborates on the rationale behind the adjustment, noting updates to their financial model to incorporate AST’s latest financing efforts and commercial contracts. The timing and costs associated with satellite launches have been clarified, and there is an expectation of reduced capital expenditure for the year 2024, estimated around $80 million less than previously projected.

In addition to the lowered capex forecast, the bank has also taken a more conservative stance on AST’s multi-year subscriber growth, suggesting a slower ramp-up for the business. However, this conservative forecast is somewhat balanced by anticipated incremental revenue from the government and public service market.

The revised 12-month stock price target of $19, down from $23, is primarily attributed to the dilutive impact of the company’s recent financing activities. Despite the lowered target, the analyst emphasizes that the potential for a significant return remains.

Based on the current share price, the new price target suggests a roughly ninefold return, which the analyst believes indicates a favorable risk/reward profile for AST Spacemobile’s stock.

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