fbpx
QQQ
-1.25
343.51
-0.37%
DIA
-2.67
346.08
-0.78%
SPY
-2.22
426.70
-0.52%
TLT
-0.12
141.17
-0.09%
GLD
-2.96
177.01
-1.7%

Exploring An Upgrade On Discovery Communications, Questions Remain

by
September 15, 2017 10:32 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Credit Suisse upgraded shares of Discovery Communications Inc. (NASDAQ:DISCA) (NASDAQ:DISCB), premised on its view that the near-term outlook is solid. The stock was lifted from Underperform to Neutral, with a price target lowered from $23 to $22.

Analysts Omar Sheikh, Lawrence Dann-Fenwick and Boyao Sun attributed the upgrade to upbeat management commentary on third quarter advertising and international affiliate trends, increased confidence that the Scripps Networks Interactive, Inc. (NASDAQ:SNI) transaction can generate revenue synergies as well as cost savings, especially outside of the United States.

Additionally, the analysts noted that Discovery Communications stock has pulled back steeply.

See Also: Disney Rattles Media Sector On Pullback Of Marvel, 'Star Wars' Offering

Credit Suisse pointed to the positive third quarter data points highlighted by management in investor meetings, with solid third quarter U.S. advertising trends, low-double digit growth in scatter pricing and higher ratings at TLC and ID.

Although viewing the deteriorating subscriber trends in the U.S. as a long-term concern, Credit Suisse believes the emergence of non-sports "Entertainment-only" packs will serve to mitigate the decline over the next 12-18 months.

"Q3 international affiliate revenues will be supported by "very healthy" uptake of the Eurosport player app with Bundesliga content in Germany since the start of the new soccer season; and by new distribution deals signed with Amazon.com, Inc. (NASDAQ:AMZN) in the UK and Germany for Eurosport/Discovery," the firm said.

Credit Suisse raised its 2017 earnings per share estimate from $2.21 to $2.26, but lowered its 2018 estimate from $2.51 to $2.47.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

Here's How Much New G7 Tax Proposals Could Hurt FANG Stocks

Over the weekend, finance ministers from G7 economies agreed to new global tax policies that could potentially have a major impact on big tech stocks. What Happened: G7 members Canada, France, Germany, Italy, Japan, the United Kingdom and the United States pledged to enforce a minimum global corporate tax rate of at least 15%. read more

AMC Playing The 'Game' Lot Better Than GameStop, Says NYU Professor Aswath Damodaran

AMC Entertainment Holdings Inc. (NYSE: AMC), which raised $587.4 million in additional capital through a stock offering on Thursday, is playing the "game" a lot better than GameStop Corp. read more

Amazon Could Be Prepping For Broader Same-Day Shipping: What This Means For The Retail Giant

Amazon.com, Inc. (NASDAQ: AMZN) could soon be launching a broader same-day shipping offering, according to an analyst at Morgan Stanley. The Amazon Analyst: Analyst Brian Nowak has an Overweight rating and a $4,500 price target. read more

Why BTIG Is Bullish On Plug Power, Nikola

Nikola Corporation (NASDAQ: NKLA) and Plug Power Inc. (NASDAQ: PLUG) are two energy stocks that have excited and disappointed investors in equal measure in recent times. read more