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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

DateFirmActionFromTo
Dec 2014National Alliance SecuritiesUpgradesHoldBuy
Dec 2014MacquarieUpgradesNeutralOutperform
Sep 2014National AllianceDowngradesBuyHold

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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