UPDATE: Pivotal Research Group Reiterates Buy Rating, Lowers PT on DIRECTV
In a report published Wednesday, Pivotal Research Group reiterated its Buy rating on DIRECTV (NASDAQ: DTV), but lowered its price target from $68.00 to $64.00.
Pivotal Research noted, “Overall DTV 3Q results were fine. DTV subscribers in US were in the 50-100K expected range as churn related to the Viacom dispute drove results (+67K) below our and consensus +100K expectation. U.S. ARPU was better than expected and US-EBITDA was in-line with expectations. DTV Lat Am subscriber results were just below the 550K-600K expected range (+543K) as churn also was higher than expected driven by an increasing % of subscribers that are middle market/prepaid Brazilian customer service issues. The lone disappointment in the 3Q from our perspective was DTV-LatAm EBITDA growth (+5% vs. +10% expectations) although this was partly reflective of some temp issues and record gross subscriber additions. As growth slows EBITDA margins should expand. Although we view some of these costs hits as temporary in the interest of conservatism we trimmed our outlook for LatAM EBITDA margins which drove a $4 reduction in our DTV target price from $68 to $64.”
DIRECTV closed on Tuesday at $50.51.
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