Goldman Sachs Upgrades Time Warner Inc.

Goldman Sachs upgraded Time Warner Inc. TWX from Neutral to Buy and added the stock to its Conviction List Tuesday.  The firm set a $90 price target.

Analysts led by Drew Borst believed that “HBO should improve the monetization of its content through initiatives including (1) the launch of HBO OTT in 2015; (2) monetizing non-revenue generating subscribers as TWX continues through its affiliate renewal cycle; and (3) improving penetration among underperforming distributors through new marketing campaigns.”

“Warner Bros. is entering an accelerated content cycle and we expect DC Comics to serve as a catalyst for film (Batman v. Superman in March 2016), television (five DC TV series currently on air, with three more next season), and consumer products,” according to Borst.

The analyst report also noted that with “ongoing challenges in TV advertising, TWX’s sector-low ad exposure reduces earnings risk. TWX generates 18 percent of revenue from advertising, the lowest among peers. TBS and TNT generate 39 percent of total advertising from sports, which remains in high demand among advertisers.”

The firm raised its 2015 EPS estimate to $4.72 ($4.67 prior) “based on increased confidence in TWX’s earnings growth.”

Time Warner Inc. recently traded at $78.00, up 0.87 percent.