UPDATE: Stifel Nicolaus Initiates Starz at Sell on on Margin Compression Concerns

Stifel Nicolaus initiated coverage on Starz

with a Sell rating. Stifel Nicolaus noted, "While the company continues to generate strong amounts of free cash flow and has studio output deals until 2016, we see the business as experiencing margin compression over the next few years as recent subscriber agreements come at lower pricing coupled with a ramp in original programming costs. Longer term, we have considerable concern over the terminal value of the business given the leverage of its last remaining studio output partner Starz closed at $16.10 on Thursday.