UPDATE: ISI Group Initiates Coverage on Scripps Networks on Brand Extension, High Programming Spending

In a report published Wednesday, ISI Group analyst Vijay Jayant initiated coverage on Scripps Networks Interactive (NYSE: SNI) with a Neutral rating and $79.00 price target.In the report, ISI Group noted, “We are initiating coverage of Scripps Networks Interactive (SNI) shares with a Neutral rating and a $79 price target at year-end 2014. Scripps focuses on the ‘Lifestyle Media' programming genre: it owns 69% of Food Network and Cooking Channel (with Tribune (TRBAA, NR)), 65% of Travel Channel (with Cox Communications), and 100% of the HGTV, DIY, and Great American Country (GAC) cable networks. We believe the growth trajectory of the Travel Channel brand will be central to the Scripps Networks investment thesis. Scripps Networks has been one of the advertising growth leaders in the domestic cable network sector in recent years, driven by a high degree of viewer engagement and loyalty with its programming and show personalities, which in turn attracts advertisers. While that growth is moderating in the US after a post-recession rebound (many show topics rely on a vibrant housing market and a healthy disposable income environment), international expansion is just in a fledgling stage, and needs local customization.”Scripps Networks Interactive closed on Tuesday at $74.94.