UPDATE: Brean Capital Reiterates Buy Rating, Raises PT on DIRECTV
In a report published Monday, Brean Capital reiterated its Buy rating on DIRECTV (NASDAQ: DTV), and raised its price target from $57.00 to $62.00.
Brean Capital noted, “Shares of DTV continue to trade at a discount to fair value. We sat down with DirecTV at CES for an update. Management affirmed that it saw stronger than expected momentum in 4Q12, and gave an outlook for high-single digit revenue growth and stable margins in 2013. Shareholder returns will decelerate to $3 billion from $5 billion in 2012 but should afford close to 20% EPS growth in 2013 and 2014. We have updated our model and are raising our outlook for 4Q12 and 2013 sub growth, revenue, EBITDA and EPS. DirecTV attributes its stock trading at a discount to growth to the terminal value placed on U.S. operations, and recognizes the need for an OTT means of distribution to enable TV Everywhere and reach lower ARPU segments of the market. However, with little current pressure on its business, we believe DirecTV is likely to build rather than buy, adding certainty to capital returns, which we believe will continue to lead the industry. As a result, we are raising our target price for shares of DTV to $62 from $57 and we reiterate our Buy rating.”
DIRECTV closed on Friday at $52.40.
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