Time Shares Rally Following Macquarie's Upgrade To Outperform

Time Inc TIME shares received a boost on Thursday, ticking up about 1.8 percent. The stock was upgraded by Macquarie from Neutral to Outperform earlier in the morning. Analyst Tim Nollen believes Time is "reinventing itself."

"Time Inc. should see a dramatic turnaround in earnings and cash flow starting in H2 this year, after heavy cost cutting the past 2 years and investments in content now," Nollen wrote. "The company is reinventing itself far beyond its legacy magazine publishing into a multi-media business built on well-known brands, with a growing presence in video, events and ad tech services. Most of the heavy lifting is now behind it, and the stock trades at very attractive levels, offering 11% FCF yield and 6% dividend yield."

The note continued, " Non-print revenues should rise to 1/3 of total this year, and Time has some impressive stats on its brands’ digital viewership: 150m global unique users, and a US monthly unique reach that ranks 5th after Google, Facebook, Yahoo and Microsoft. Time has a big opportunity to combine its online and mobile content base at People, Sports Illustrated, Time, and other brands."

The analyst reduced 2016 EPS from $1.49 to $1.44, expecting a drop in Q2. He also raised his price target from $16 to $17.

Shares closed at $13.98, up 1.82 percent.