Skip to main content

Market Overview

Citi Raises Time Warner's Price Target On HBO, 'Batman V. Superman' Success

Share:

Citi’s Jason B. Bazinet believes Time Warner Inc (NYSE: TWX)'s stock valuation warrants to trade at a higher P/E multiple due to various factors.

Bazinet maintains a Buy rating on the company, while raising the price target from $83 to $85.

Positive Trends

The analyst mentioned that Time Warner was likely to benefit from two trends. Firstly, affiliate fees were expected to accelerate with the company’s cable networks entering a new renewal cycle.

Secondly, Bazinet expects the stock to see upside, “since the new firm (made up of only Turner, HBO and Warner Bros.) will have a higher growth rate.”

Related Link: CinemaCon 2016: Warner Bros. Betting On Comedy, Animation And Connected Universes

Higher Multiple Warranted

Bazinet also pointed out that Time Warner’s stock deserves to trade at a higher multiple, given that the company’s EPS was expected to grow at a faster pace than its other media peers and the S&P through 2016.

In addition, the analyst noted that “Time Warner's revenues are less exposed to the rising risk posed by SVOD providers.”

According to the Citi report, “The company's growth trajectory is more reliant on comparatively more volatile income from Warner Brothers than we previously had forecasted.”

Estimate Revised

The EPS estimate for 2017 has been raised from $5.91 to $6.01 to reflect marginally higher advertising growth at Turner.

The revised estimate also reflects a decline in FX headwinds at both Turner and Warner Bros., in line with the expectations, as well as an improvement in Warner Bros.’ performance due to "Batman V Superman."

Latest Ratings for TWX

DateFirmActionFromTo
Jun 2018Loop CapitalDowngradesBuyHold
Jun 2018Barrington ResearchDowngradesOutperformMarket Perform
Jun 2018Moffett NathansonDowngradesBuyNeutral

View More Analyst Ratings for TWX
View the Latest Analyst Ratings

 

Related Articles (TWX)

View Comments and Join the Discussion!

Posted-In: Batman V Superman CitiAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
SDVKYHSBCUpgrades
WDAYNeedhamMaintains290.0
AAXNNeedhamMaintains190.0
LNTHSVB LeerinkMaintains25.0
CRMPiper SandlerMaintains240.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com