Analysts eye gems among turmoil

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There's opportunity for savvy media investors amid the market's recent gyrations.

First up is World Wrestling Entertainment, a company that Utendahl Capital Partners initiated coverage of this week with an "over-weight" recommendation.

The shares closed Thursday at $18.61 and Utendahl analyst Alden Mahabir set a $21 target price on them. Couple share appreciation with an 8% dividend yield and shareholders could see about a 22% return over the next year.

"WWE is one of the rare finds in the media and entertainment sector, offering an attractive dividend and solid growth," Mahabir said. He predicts 12% annual earnings growth through 2011.

Mahabir says that the company has done "an exceptional job" of expanding beyond live events so that it now generates revenue from 14 streams.

"The company's ability to successfully drive revenue from all these different channels speaks volumes about the appeal of its content and lends credence to the notion that content is king," Mahabir said.

Next up is Adobe Systems, which Canaccord Adams added to its "Best Idea" list this week.

The maker of such media-intensive software as Flash, Photoshop and Illustrator has been on a roll even during these economically challenged times, according to Canaccord analyst Steven Frankel.

Frankel increased his earnings-per-share estimate for 2008 from $1.85 to $1.90 and said the company ought to earn $2.20 a share in 2009 on $4.1 billion revenue.

His target price is $53 and shares closed Thursday at $34.45.

Also getting some love on Wall Street were Amazon.com and Imax.

Merriman Curhan Ford analyst Eric Wold said that Imax is headed toward profitability in the second half of the year and the stock could trade as high as $10 a share, as opposed to $6.28, where it closed Thursday.

Imax generated $145 million in boxoffice revenue last year, an increase of 56% over the prior year, and Wold thinks that Imax has been negotiating a greater share of that revenue from the movie studios.

Citigroup analyst Mark Mahaney, meanwhile, has been touting Amazon.com because he expects the stock to go to $97 a share from Thursday's close of $73.19.

"Despite recessionary conditions, we view Amazon.com as having one of the strongest fundamental outlooks in the Internet sector," Mahaney said.
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