Shares of Globalstar (GSAT -2.52%) fell on Friday, following bearish analyst remarks. As of 11:20 a.m. EST, the satellite communication specialist's stock price was down 15%.
Morgan Stanley analyst Simon Flannery cut his rating on Globalstar's stock from equal weight to underweight and placed a $0.55 price forecast on its shares. Flannery's price estimate implies a potential downside risk for investors of roughly 48% from the stock's current price near $1.06.
With Globalstar's share price quadrupling in recent months, Flannery posits that investors are valuing the company's spectrum assets at $2.2 billion. But he cautions that Globalstar may find it difficult to monetize these assets, as he does not see any significant sales taking place in the near future.
Globalstar's stock price soared in recent weeks following deals with Nokia and Battlbox. Nokia is working with Tideworks Technology to deploy Globalstar's Band 53 spectrum at the Port of Seattle. Meanwhile, Battlbox subscribers will receive a Gen GPS Messenger device from Globalstar's SPOT subsidiary as part of their monthly subscription box service.
Yet, although these deals are certainly positives for Globalstar, they likely don't justify the sharp upward move in its stock price so far this year. Investors, therefore, may want to consider taking profits in Globalstar.