UBS Maintains a 'Neutral' on Discovery Communications (DISCA); Netflix (NFLX) Deal More Accretive than Expectations
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Price: $24.43 --0%
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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UBS maintains a 'Neutral' on Discovery Communications (NASDAQ: DISCA) price target raised $1 to $43.
UBS analyst says, "Q3 OIBDA excl. 1x items (NFLX, content chg) of $437M was essentially in line with our $436M (Street: $441M). Ad growth came in 100bps better in the U.S. (11% vs. our 10%) and int’l (16% vs. our 15%) & DISCA expects acceleration in 4Q to mid-teens growth in the U.S. (UBSe: 14% vs. prior 9%/FC: 13%), and DD growth internationally (UBSe: 12% vs. prior 10%). We are
raising our ‘11E rev/OIBDA/EPS to $4.22B/$1.94B/ $2.38 (vs. prior $4.10B/$1.90B/2.26) mostly on the incremental from the Netflix (Nasdaq: NFLX) deal."
"The NFLX deal contributed $77M in rev and $66M in OIBDA ($0.11/share) to 3Q results, well above our initial expectations. We estimate there are ~860 hrs of content currently on NFLX which equates to ~$90K/hr, a deal we view as attractive given the deal is non-exclusive, incl. content 18+ mos old, and should contribute 200-300bps to U.S. distribution revenue growth over the next 7 quarters."
For more ratings news on Discovery Communications click here and for the rating history of Discovery Communications click here.
Shares of Discovery Communications closed at $42.27 yesterday.
UBS analyst says, "Q3 OIBDA excl. 1x items (NFLX, content chg) of $437M was essentially in line with our $436M (Street: $441M). Ad growth came in 100bps better in the U.S. (11% vs. our 10%) and int’l (16% vs. our 15%) & DISCA expects acceleration in 4Q to mid-teens growth in the U.S. (UBSe: 14% vs. prior 9%/FC: 13%), and DD growth internationally (UBSe: 12% vs. prior 10%). We are
raising our ‘11E rev/OIBDA/EPS to $4.22B/$1.94B/ $2.38 (vs. prior $4.10B/$1.90B/2.26) mostly on the incremental from the Netflix (Nasdaq: NFLX) deal."
"The NFLX deal contributed $77M in rev and $66M in OIBDA ($0.11/share) to 3Q results, well above our initial expectations. We estimate there are ~860 hrs of content currently on NFLX which equates to ~$90K/hr, a deal we view as attractive given the deal is non-exclusive, incl. content 18+ mos old, and should contribute 200-300bps to U.S. distribution revenue growth over the next 7 quarters."
For more ratings news on Discovery Communications click here and for the rating history of Discovery Communications click here.
Shares of Discovery Communications closed at $42.27 yesterday.
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