Always an upside

Analysts positive despite market woes

After recent stock-market woes, several high-profile media companies saw analysts boost their stock ratings or earnings estimates last week.

One of the sector biggies getting some Street love was News Corp. as Merrill Lynch analyst Jessica Reif Cohen raised her earnings expectations for the conglomerate, saying its "Internet assets drive improved valuation."

Reif Cohen boosted her fiscal year 2008 earnings per share estimate from $1.16 to $1.28 and reiterated her "buy" rating on the stock.

The increase was helped by the fast-growing Fox Interactive Media unit, which includes the MySpace online community. "We now project it will generate nearly $1 billion in revenue and over $200 million in operating income in (fiscal year 2008), accounting for $0.03 of our earnings per share increase," she said. A share buyback from Liberty Media accounts for another 9 cents-a-share boost to her estimates, Reif Cohen said.

She raised her price target on News Corp. to $30 from $27. "We view the recent macro-driven pullback in the stock as an extremely attractive entry point," she said.

Cablevision Systems also got some Street support as Miller Tabak + Co. analyst David Joyce upgraded its shares from a "neutral" to a "buy" rating and increased his price target by $5 to $35.

"This decision may be controversial for a number of reasons that would still give us pause: the recent market correction when many stocks are revalued; the knowledge that the uncertainty factor surrounding the next Dolan family move causes some 'Dolan discount' to be applied to the stock; and the encroaching share that Verizon could take and which should cause Cablevision to spend more in marketing and perhaps in the form of price competition as well," Joyce said.

However, he argued that "there are a few justifications for a higher price for patient investors."

Among others, Joyce said that the recent $30 per share privatization attempt by the Dolan family, which controls the firm, provides stock- price support. Also, he argued that the breakup value of the company could be as high as $42 a share.

CBS Corp. Class B shares didn't need much support from analysts as its shares shot up 4.5% in one day after the company unveiled a $1.4 billion stock buyback, which will nearly exhaust a recently announced $1.5 billion repurchase program.

Still, Joyce raised the stock from "neutral" to "buy" and his price target to $36 from $35, citing the buyback program and an improved growth profile.
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