Guggenheim Cuts Price Target on AMC Networks (AMCX) to $66; Reiterates Buy
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Guggenheim maintained a Buy rating on AMC Networks (NASDAQ: AMCX), and cut the price target to $66.00 (from $77.00), after adjusting the company model. Management is “focused on being a content company which was a channel company” in the words of CEO Josh Sapan. Guggenheim updated the AMC model for a more conservative advertising revenue outlook and believes that the model reflects conservative assumptions with 2017 EPS of $6.06 compared to the consensus of $6.33.
Analyst Michael Morris commented, "We have updated our AMC Networks model ahead of the company's 3Q16 earnings (likely early November). AMCX shares have underperformed the market and media peers since the start of season six of The Walking Dead on October 11, 2015, reflecting investor concern toward the apparent maturity of the franchise (live audience declined 9% during the season). The show returns for its seventh season beginning on Sunday, October 23 and we expect it to be a key catalyst for sentiment. Our updated advertising revenue outlook assumes a 15% decline in monetizable ratings for the show during the 2016-17 season."
Shares of AMC Networks closed at $51.47 yesterday.
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