Analyst: 'TBS May Have Found Its Own Snooki'

The Big Bang Theory - TV Still: "The Infestation Hypothesis" - Jim Parsons, Johnny Galecki - H - 2011
Adam Taylor/Warner Bros.

"The Big Bang Theory" has helped revive ratings, and Time Warner's stock would benefit if positive trends continue, argues Susquehanna's Vasily Karasyov.

NEW YORK - Recent ratings concerns about Time Warner's TBS "will prove to be overdone" thanks to recent new hit programming, particularly The Big Bang Theory, Susquehanna Financial Group analyst Vasily Karasyov said in a report on Thursday.

His report's title: "TBS May Have Found Its Own Snooki" - a reference to the strength of Big Bang Theory, which has helped start a ratings upswing at the network. If that continues, TW's stock should benefit, argued the Wall Street observer who has a "positive" rating and a $42 price target on the stock.

"Ratings started stabilizing at TBS in the fourth quarter with December prime time audience up 13 percent year-over-year," Karasyov wrote. "If the recovery takes hold, we would expect TW's price/earnings multiple [and therefore its stock] to expand 9 percent, similarly to what we saw at Viacom after MTV's ratings turned around in 2010" thanks to Jersey Shore and Nicole "Snooki" Polizzi.

With TBS ratings also up so far in 2012 both in prime time and on a total day basis, "we may have reached the turning point TW investors have been waiting for," the analyst concluded.

But he also cautioned that "the recovery needs to be broad at TBS, and TNT needs a turnaround, too." Added Karasyov: "We will be watching if ratings improvement at TBS is more than just The Big Bang Theory - some investors will remember a short-lived ratings pop at MTV after America’s Next Top Model reruns started."


Twitter: @georgszalai