Collins Stewart on PayTV Quarterly - 2Q11 - Cautiously Optimistic
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Rating Summary:
5 Buy, 22 Hold, 0 Sell
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Today's Overall Ratings:
Up: 1 | Down: 4 | New: 14
Rating Summary:
5 Buy, 22 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 1 | Down: 4 | New: 14
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Collins Stewart on PayTV Quarterly - 2Q11 - Cautiously Optimistic
Collins analyst says, "Although recent economic metrics indicate a murky outlook for the U.S. economy, we expect most major PayTV operators will generate mid-single digit OCF in FY11. Perhaps as important, several of the perennial risks that have plagued the stocks, such as acquisition, OTT and regulatory risk, have abated enhancing prospects for multiple expansion. Overall, we continue to favor DirecTV (NYSE: DTV) as it best combines strong fundamentals (customer and financial) and capital allocation to shareholders."
Cablevision (NYSE: CVC): new target of $32 - Following the spin out of AMC, our new target for CVC is $32, 23% above current levels. With reduced acquisition risk, we expect continued multiple expansion.
Comcast (Nasdaq: CMCSA): Increasing RGU estimates We have increased our RGU estimates for both 2Q11 and FY11 as we expect continued solid cable fundamentals. Recent investment in Parks and the Olympics should add value to NBCU.
Time Warner Cable (NYSE: TWC): Another authorization likely by 3Q - Although TWC’s cable results have trailed CMCSA’s somewhat, TWC allocates more capital to shareholders. We expect both of these trends to continue. By 3Q11, we expect TWC will increase its repurchase authorization by $3bn.
Dish Network (Nasdaq: DISH): Raising target to $37 - As we flow through our higher FY11 EBITDA estimates and recent acquisitions, our DISH target increases from $30 to $37.
DTV: new service launches and Latam debt talks in 2H11 Following what we expect will be a solid 2Q results, it appears that DTV will be busy this 2H11 rolling out several new services and features. While several of these launches will serve to reduce churn, others will generate incremental revenue and OCF. We also expect DTV mgmt to accelerate its conversations with the ratings agencies about including DTV Latin American (Latam) OCF into its debt rating.
Collins Stewart maintains a 'Buy' rating on all the above stocks
Collins analyst says, "Although recent economic metrics indicate a murky outlook for the U.S. economy, we expect most major PayTV operators will generate mid-single digit OCF in FY11. Perhaps as important, several of the perennial risks that have plagued the stocks, such as acquisition, OTT and regulatory risk, have abated enhancing prospects for multiple expansion. Overall, we continue to favor DirecTV (NYSE: DTV) as it best combines strong fundamentals (customer and financial) and capital allocation to shareholders."
Cablevision (NYSE: CVC): new target of $32 - Following the spin out of AMC, our new target for CVC is $32, 23% above current levels. With reduced acquisition risk, we expect continued multiple expansion.
Comcast (Nasdaq: CMCSA): Increasing RGU estimates We have increased our RGU estimates for both 2Q11 and FY11 as we expect continued solid cable fundamentals. Recent investment in Parks and the Olympics should add value to NBCU.
Time Warner Cable (NYSE: TWC): Another authorization likely by 3Q - Although TWC’s cable results have trailed CMCSA’s somewhat, TWC allocates more capital to shareholders. We expect both of these trends to continue. By 3Q11, we expect TWC will increase its repurchase authorization by $3bn.
Dish Network (Nasdaq: DISH): Raising target to $37 - As we flow through our higher FY11 EBITDA estimates and recent acquisitions, our DISH target increases from $30 to $37.
DTV: new service launches and Latam debt talks in 2H11 Following what we expect will be a solid 2Q results, it appears that DTV will be busy this 2H11 rolling out several new services and features. While several of these launches will serve to reduce churn, others will generate incremental revenue and OCF. We also expect DTV mgmt to accelerate its conversations with the ratings agencies about including DTV Latin American (Latam) OCF into its debt rating.
Collins Stewart maintains a 'Buy' rating on all the above stocks
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