Needham & Company Reiterates Buy Rating and $72 PT on CBS Corp. (CBS) Following 4Q16 Report

Needham & Company analyst Laura Martin reiterates Buy rating and $72 price target on CBS Corporation (NYSE: CBS), suggesting potential revenue upside with cost controls, as the company reported 2016 fourth quarter revenues and adjusted EPS above estimates.

Martin notes, "For 4Q16, excluding CBS Radio, CBS reported revenue of $3.52B (down 2% y/y, 1% above estimates), Operating Income of $733mm (up 10% y/y, in line with estimates), and Adjusted EPS of $1.11 (up 21% y/y, 2% above estimates). Our top 3 takeaways from the call are: 1) CBS studios is now producing content for 13 outlets, including AAPL, NFLX, Hulu, TBS, etc., suggesting new revenue streams; 2) In FY16, Entertainment revenue grew 5% and operating profits grew 3x faster at 17%, so while competitors talk about rapidly rising content costs CBS is keeping programming costs down to low single-digits; 3) local ad revenue rose 25% y/y in 4Q16, driven by political ad revenue which we estimate reached a record $190mm in 2016, yet CBS projects local ad revenue growth again in 2017."

For an analyst ratings summary and ratings history on CBS click here. For more ratings news on CBS click here.

Shares of CBS closed at $65.24 yesterday.

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