UPDATE: Morgan Stanley Reiterates on Starz on Some Positive Signs Ahead
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
|Dec 2014||National Alliance Securities||Upgrades||Hold||Buy|
|Sep 2014||National Alliance||Downgrades||Buy||Hold|
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