Despite Charlie Sheen Woes, Wall Street Raves About CBS

CBS

Even with 'Two and a Half Men" production problems, the network is increasingly appealing to stock analysts.

Charlie Sheen’s anti-CBS rants aside, the network must be doing something right, because Wall Street analysts keep raving about the company.

The latest example comes from David Joyce at Miller Tabak, who upped his one-year target price on CBS Corp. stock to $28 and figures the sum-of-the-parts value of CBS is nearly $34 a share.

In a broad sell-off Tuesday that knocked 168 points off the Dow, shares of CBS closed down 3% to $23.19.

During the action on Wall Street, Leslie Moonves, the CBS chief executive, was telling analysts during an investors conference that canceling — for now, at least — new episodes of Sheen’s expensive hit show Two and a Half Men will, in fact, be good for the company’s bottom line.

Joyce, though, is more interested in the estimated $84 million a year that could come from the company’s recent deal to provide streaming content to Netflix.
If Apple, Google or others become meaningful competitors to Netflix, it could mean an additional $212 million in annual revenue paid to CBS for digital streaming rights to its content, Joyce wrote in a report Tuesday.

Joyce also is bullish on CBS College Sports because of the advertising around the NCAA basketball tournament, and his note to clients mentions upside potential in publishing, local broadcasting, online initiatives and outdoor advertising.

Last week, Benjamin Swinburne of Morgan Stanley added CBS to his “best ideas list,” while Alan Gould of Evercore Partners and John Janedis of UBS each upped his targets on the stock, boosting CBS shares to new highs.

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