CBS (CBS) PT Raised to $73 at Wedbush
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Wedbush analyst James Dix reiterated an Outperform rating and raised his price target on CBS (NYSE: CBS) to $73.00 (from $65.00), saying one "Les" company in big media should be more for CBS shareholders.
The firm places a 75% probability on a merger, which they assume would be an all-stock transaction.
In their base case merger scenario, they see good EPS accretion to their 2020 CBS EPS estimates. "We assume a “no premium” deal, with current prices used to determine the exchange ratio. The details in determining the appropriate valuations for the exchange ratio could result in some meaningful premium or discount to the exchange ratio implied by current prices, however. In our base case, we estimate 2020 EPS for CBS of $9.80, vs. $6.88 in our stand-alone CBS forecast. Key drivers of accretion would be: 1) merger synergies of roughly $550m, 2) some operating improvement at VIAB’s media networks and Paramount, and 3) leverage allowing for a good pace of share repurchases."
If there is no deal, they still see solid upside for CBS shares.
Shares of CBS closed at $55.11 yesterday.
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