Pivotal Research: 15% Chance DirecTV & AT&T Deal Not Approved

Pivotal Research weighed in on the possibility of a deal between between DirecTV DTV and AT&T T.

According to the research report, there is a 15 percent chance the deal will not be approved.

“U.S. competition will be reduced from 4 to 3 players in a period of consumer Pay-TV rates rising materially faster than inflation.”

The note further states if the deal is not approved, DirecTV will fall to the mid $70 level (about 17.6 percent downside).

Related Link: Are Investors Undervaluing The Gannett Restructuring?

Other risks to DirecTV include increasing competition, Latin America contributing a large amount of earnings, NFL contract repricing and rising content costs.

The $90 price target is based on the buyout with a five percent reduction to AT&T’s current price.

Shares of DirecTV were last trading 0.5 percent lower to $84.75.