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UPDATE: Benchmark Company Reiterates Buy Rating, Raises PT on CBS Corporation

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In a report published Friday, Benchmark Company reiterated its Buy rating on CBS Corporation (NYSE: CBS), and raised its price target from $44.00 to $48.00.

Benchmark Company noted, “CBS (CBS-Buy, PT from $44 to $48) announced that it has begun the process of converting its Outdoor Americas division into a real estate investment trust (REIT) and plans to divest its outdoor operations in Europe and Asia. The Company began the conversion process by submitting a request for a private letter ruling from the IRS during 1Q13. If the ruling is granted, the REIT conversion could be completed in the taxable year of 2014. As a result of its divesture plan, outdoor operations in Europe and Asia will be presented as discontinued operations as of December 31, 2012 and will not be consolidated with 2013 operating results. For 2012, we estimate Outdoor revenues to be $1.9 billion, with 60% from the Americas and 40% from Europe and Asia. Total EBITDA is expected to be $380 million. The Americas and Asia are profitable but Europe is unprofitable because of losses on the London Underground contract. We expect at least a part of the proceeds will go towards share repurchases while REIT status should unlock further value.”

CBS Corporation closed on Thursday at $40.95.

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