In a report published Monday, Deutsche Bank analyst Doug Mitchelson reiterated a Hold rating on Starz STRZA, and raised the price target from $18.00 to $22.00.
In the report, Deutsche Bank noted, “Starz trades at 11x ‘13e FCF/shr vs the Entertainment group at 18x. While this discount is sizeable, it is reasonable given: (1) increasing SVOD competition and Disney movies move from Starz to Netflix in 2016; (2) the strategy to invest in TV taking years to prove out with success uncertain, (3) we see no strategic buyer for Starz and its lack of scale suggests future difficult affiliate renewals. Maintain Hold.”
Starz closed on Friday at $24.78.
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