Goldman Sachs Upgrades Discovery and Scripps, Deutsche Bank Upgrades CTC Media

Goldman Sachs downgraded Discovery Communications

to sell and upgraded Scripps Networks Interactive

to Buy on Friday, while Deutsche Bank upgraded CTC Media

to Buy. As reported

, Goldman Sachs noted, "In our view, estimates and the multiple will contract on weak ratings, peer-high euro exposure, and competition from the Olympics. Our revised 2012E EPS is 4% below consensus (6% below in 2H12). DISCA shares are up over 25% year to date (vs. large cap peers +15%), with 85% of the appreciation due to multiple expansion. While recent digital deals drove higher than expected earnings, we don't think DISCA should trade at a historic average P/E given the headwinds that we see leading to more peer-like growth." Of the Scripps upgrade,

, "We upgrade Scripps Networks to Buy from Sell with 18% upside potential to our revised $63 target price ($50 prior). Our 2012/13/14E EPS is increased by 5%/13%/13% due to lower share count, higher advertising and online streaming deal. Since SNI was added to our Sell list on January 31, 2011, its shares are up 14% vs. the S&P up 4%. We see the stock being bolstered by strong TV ratings (especially at Food), limited international exposure and the potential EPS accretion from online streaming deals and a potential Food Network buy-in that alone could boost 2013 EPS by around 14% and lower the P/E by a turn and half."

that Deutsche said of the CTC Media upgrade, "We have updated our CTC Media model, incorporating our more conservative estimates for CTC Media's audience share as a result of weak ratings for the flagship channel in 2Q12 as well as the latest FX and macro forecasts. We reduce our earnings estimates by 11-24% in 2012-14F and cut our target price by 21% to USD9.5. However, we upgrade the stock to Buy due to attractive upside to our target price, dividend yield and discount to peers." It is interesting that Discovery, the nonfiction media and entertainment company, is downgraded while Scripps, a lifestyle content company, and CTC Media, which operates three Russian entertainment television networks, are upgraded. The cynical might conclude that television audiences are getting dumber and requiring more "lifestyle" and "entertainment" programming rather than Discovery-esque documentaries. The real key, though, is in the comment from Goldman reading "we don't think DISCA should trade at a historic average P/E given the headwinds that we see leading to more peer-like growth." In that might, the moves make sense. On Friday afternoon, Discovery Communications traded at about $50.20, down roughly 0.06 percent. Scripps Networks Interactive traded at about $55, up roughly 3.7 percent. CTC Media traded at about $7.80, up roughly 0.8 percent.