Axiom: Buy HSN On 'Growth Momentum,' It's Worth $77/Share

In a report published Tuesday, Axiom Capital Research analysts initiated coverage of HSN, Inc HSNI with a Buy rating and a price target of $77. HSN is engaged in a variety of businesses including a TV shopping network, and Cornerstone-a collection of print catalogues, retail and outlet stores. The company's TV shopping business continues to perform well with performance driven by continued investments in technology and the company's partnerships with media-companies such as Walt Disney Co DIS. "We see these trends continuing to benefit the network, leading to sustained mid-single digit top-line growth, and margin expansion over the next three years," the analysts mentioned. Although the performance of the company's Cornerstone segment has been uneven over the past several quarters, some brands showed improved performances during 1Q05. A continuation of this trend could boost HSN's stock valuation in the near future. "The confluence of the performance momentum at both segments should lead to mid-teens EPS and FCF per-share (normalized) growth over the next three years," the analysts added. HSN's strong presence in the TV Shopping industry, its solid management team and a good business model with good cash flows make it an acquisition target