Spark shares have tumbled this week, along with most tech stocks and the broader market.
For Jarden analysts Arie Dekker and Grant Lowe, that means the telco has now reached a point close to what they judge as its fair valuation - and the pair upgraded it from underperform to neutral in a note issued overnight titled "sell-off provides opportunity."
They kept their 12-month target price at $4.05.
Spark shares closed down 4.2 per cent to $4.36 on Thursday and were down another 8.9 per cent to $3.97 as the NZX opened sharply down following the bloodbath on Wall Street.
Spark has "clearly established its ability to sustain its current earnings despite headwinds," Dekker and Low said.
And now, for the first time in five years, its share price is in line with their valuation.
The telco reported a strong half-year result last month on the back of strong performance in its mobile division, with net profit up 9.2 per cent to $167m and revenue up 4 per cent to $1.82b.
Spark is exposed to the likely downturn in general consumer spending, but could also potentially earn more revenue on the business side as organisations upgrade remote working systems.
Spark Sport will be hit by The telco is exposed to the likely downturn in general consumer spending. Signature content like NBA basketball and Formula 1 has already been effected, with at least a degree of disruption to English Premier League football to follow.
Who pays more for mobile & broadband: Aussies or Kiwis? Watchdog's answer
How Spark Sport chipped in to telco's first-half result
The telco lumped sports streaming into an "other" category at its results, along with its big data unit and its internet-of-things operation. The key take away was that although it was likely a loss-maker, it was also a relatively tiny portion of Spark's overall revenue of close to $2b. Streaming rival Sky will be far more exposed to the sports slowdown (Sky was down 2.1 per cent to 45c in early trading).
Dekker and Lowe earlier said they saw Spark's sale of Lightbox as a precursor to its exit from sport. In a Herald interview, chief executive Jolie Hodson denied that, but was also wary of commenting on whether the telco would bid on top-tier rugby rights next time they came up.
Regardless, Jarden continues to see Hodson as a CEO who will "roll off" media spending after 2021. The pair praise what they see as her focus on the cloud, mobile, and keeping costs in check.
They also caution that the regulatory framework for the post-UFB rollout era is not yet set. Chorus and retailers like Spark continue to lobby the Commerce Commission over how various parameters will be set from 2022.