CBS Corp (CBS) on Fire: What is Driving the Stock Higher?

Shares of CBS Corporation CBS gained nearly 25% in the past six months on back-to-back robust quarterly numbers and the company's consistent efforts to increase subscription-based revenues. Additionally, the stock holds a Zacks Rank #2 (Buy) with a long-term earnings growth rate of 13.9% and a VGM Score of "A". Currently, the stock is hovering near its 52-week high of $58.22. Let's find out what is driving the stock higher.

CBS Corp.'s sustained focus on increasing subscription-based revenues should drive long-term growth. The company has an extensive library of premium content that it monetizes over multiple platforms. Moreover, keeping up with customer demands, the company had introduced over-the-top services, namely CBS All Access and CBSN. It also launched an independent streaming service for its premier channel – Showtime – which is available on Apple, Roku, Hulu, and Sony PlayStation as well.

The company expects political advertising to accelerate in the latter half of the year. CBS has great news for Star Trek fans. The company had earlier announced that it will be beginning a brand new Star Trek television series in Jan 2017. Once again, people will be able to enjoy the Vulcan salute, more famously known as the "Spock Salute." Per the company, the Star Trek series will be launched on CBS Television Network after a special broadcast preview. Further, the debut and following first-run episodes will run exclusively on the network's subscription video-on-demand service – CBS All Access – for the U.S. audience. The company will charge a total of $5.99 per month, for both the CBS Television station and access to its video-on-demand services.

CBS Corp. highlighted that retransmission consent and reverse compensation are expected to exceed the $2 billion mark in 2020, and is on track to hit $1 billion in 2016, a year earlier than anticipated. Several strategic deals with Sinclair, AT&T, Nexstar and others have positioned CBS Corp. favorably, enabling it to meet the retransmission targets much ahead of schedule. The company also hinted at the possibility of few media or tech companies coming up with new skinny bundles in 2016, which will help it bolster the subscription revenues.

Other Stocks that Warrant a Look

Other stocks that warrant a look in the sector include Gray Television, Inc. GTN, Starz STRZA and The E. W. Scripps Company SSP. All these stocks hold the same rank as CBS.

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