A potential spinoff of its defense technology business could cause Viasat’s stock price to soar, which is increasingly likely, JPMorgan said. The investment bank upgraded the stock from neutral to overweight. The company also raised its price target for Viasat from $23 to $50, suggesting 35% upside potential. “We see an increasing likelihood of decoupling of the defense and advanced technology (DAT) sector, including the potential separation of government and commercial operations and the collapse of existing debt silos,” analyst Sebastiano Petti said in a note to clients on Tuesday. VSAT YTD Mt. Viasat Year-to-date According to Viasat’s latest earnings report, the company’s DAT division posted a record backlog of $1.2 billion in the second quarter, up 31% year-over-year. The sector is also poised to grow due to increased reliance on space-based assets for national security purposes and growing demand for resilient communications technologies. On a call with analysts last week, Viasat CEO Mark Dankberg responded to calls for the company to spin out its DAT business, but did not provide a timeline for a decision. “We are constantly evaluating these options,” Dankberg said. “We’re just weighing the merits.” Wall Street is divided over Viasat. According to LSEG data, the stock has 4 buy or strong buy ratings, 4 hold ratings, and 1 underperform rating. Viasat rose 7% on Tuesday. The stock is up 366% this year.
