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UPDATE: Morgan Stanley Reiterates on Starz on Some Positive Signs Ahead

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In a report published Friday, Morgan Stanley analyst Ryan Fiftal reiterated an Equal-Weight rating on Starz (NASDAQ: STRZA), and raised the price target from $28.00 to $32.00.

In the report, Morgan Stanley noted, “Given two sizable rate step-downs in 4Q12 and Starz' limited scale, we have been cautious on Starz' top line growth potential. However, better than expected 4Q revs plus positive rate commentary in the 10-K suggest a more robust outlook, and we raise our Networks top line growth est. by ~60bps in both ‘14E and '15E. While Networks revs were flat in '13 (ex a 1T benefit), per sub rates were a ~100bps tailwind despite a ~300bps headwind from 4Q12 step-downs, indicating a better-than-expected 400bps underlying growth rate.

"Volume was a ~100bps headwind in '13, and while we model modest sub growth in '14, we still expect lower average subs to be a ~100bps headwind, leading to our +3% rev forecast.”

Starz closed on Thursday at $32.18.

Latest Ratings for STRZA

DateFirmActionFromTo
Apr 2015CLSAInitiates Coverage onOutperform
Apr 2015FBN SecuritiesInitiates Coverage onSector Perform
Apr 2015Deutsche BankInitiates Coverage onBuy

View More Analyst Ratings for STRZA
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Ryan FiftalAnalyst Color Price Target Analyst Ratings

 

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