Eyeing DISH 4Q: High Churn, and Stock Buybacks on Horizon?

When DISH Network reported fourth quarter results Tuesday, the financial community saw some of the same trends impacting the company: High churn, a deceleration of net subscriber additions, and the company abstaining from repurchasing shares.

That's not too much to get excited about, said some on Wall Street. But given that the company is positioning itself for a rebound, and merger and acquisition speculation continues to surround DISH, things could be looking up for the DBS service and its shares.

"For our part, we're not nearly as bearish on DISH's M&A prospects or fundamentals as the market appears to be," said Jason Bazinet of Citi Investment Research. "That is, we think the market has already assumed - like we have - that churn remains at elevated levels through 2008. As such, any improvement should cause multiple expansion."

And, "unlike the market, we're not convinced that M&A can be entirely ruled out of the valuation calculus," added the Citi analyst.

The negative for some on the Wall Street was DISH Network's high churn, at 1.71 percent. Involuntary disconnects were cited for the churn increase, "suggesting elevated churn will likely prove transitory as promotions cycle through the subscriber base," said Bazinet.

As for looking forward, stock buybacks may be on the horizon for DISH, the analyst said.

In a note released Wednesday, Bazinet maintained a "buy" rating and $46 price target on DISH stock.