Competition Slackens Allowing Cable & Satellite Providers to Raise Prices and Increase Buybacks

January 29, 2013 11:38 AM EST Send to a Friend
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Price: $20.10 -0.79%

Rating Summary:
    8 Buy, 15 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 28 | New: 51
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Analysts at Nomura Equity Research think the industry backdrop in Cable and Satellite remains favorable. There is a lot of cash to go around and the competitive landscape is expected to remain "benign", in the view of analyst Mike McCormack. This could lead companies to focus on price increases and margins as opposed to aggressive marketing. From an investment standpoint, McCormack thinks investors will continue to focus on free cash flow and expectations for share repurchases.

"After a competitive 2011, we have seen accelerating price increase activity in recent months. Prices will rise in 1Q13 for customers of Cablevision (NYSE: CVC), Comcast (Nasdaq: CMCSA), DIRECTV (Nasdaq: DTV), and DISH (Nasdaq: DISH),” he said.

“We forecast Comcast and Time Warner Cable (NYSE: TWC) will supplement their regular buyback programs with SpectrumCo proceeds, and look for $4bn and $3bn, respectively in 2013. We estimate buybacks at DIRECTV will fall from $5bn in 2012 to $3bn in 2013, as the releveraging opportunity nears an end," stated the analyst.

McCormack is Neutral on the sector, but the firm has Buy ratings on a number of related stocks, including, Comcast Corporation, Cablevision, AT&T (NYSE: T), Time Warner Cable Inc., and Verizon Communications (NYSE: VZ). Dish Network is rated Neutral, and DIRECTV is rated as Reduced.

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

Shares of Cablevision closed at $15.75 yesterday.


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Analyst Comments, Analyst EPS View, General News, Stock Buybacks

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Raising Prices, Nomura

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