UBS on Entertainment: Growth Normalizing-Lowering Ratings/Estimates
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Price: $24.43 --0%
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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UBS on Entertainment: Growth Normalizing-Lowering Ratings/Estimates
UBS analsyt said, "After several quarters of above trend growth for the sector, we are lowering our ratings on Discovey (Nasdaq: DISCA) and Time Warner (NYSE: TWX) to Neutral, as well as reducing our estimates for CBS (NYSE: CBS), Disney (NYSE: DIS), Scripps (NYSE: SNI) and Viacom (NYSE: VIA-B). The combination of a modestly slowing ad market, tough comps, the reality that the ad market is cyclical, and the potential for elevated programming costs to maintain audience are the drivers b.ehind our downgrades and estimate reductions. We maintain Buy ratings on CBS and VIA.b."
"Although the strength in this year’s upfront has been modestly ahead of our expectations, the historical relationship between calendarized growth in upfront cost per thousand (CPM) increases and network ad growth is less than most would expect. A slowing 3Q scatter market, less pricing power and the potential for scatter over scatter to be down by 4Q11 or 1Q12 are causes for concern, and in our view, will translate to downward estimate revisions relative to consensus.
"On average, we are lowering our 2H11 and 2012 ad growth estimates by 100bps and 140bps, respectively. Due to the potential for programming cost pressure following ratings softness at some networks, our decremental margin assumption is in the 50-60% range."
UBS analsyt said, "After several quarters of above trend growth for the sector, we are lowering our ratings on Discovey (Nasdaq: DISCA) and Time Warner (NYSE: TWX) to Neutral, as well as reducing our estimates for CBS (NYSE: CBS), Disney (NYSE: DIS), Scripps (NYSE: SNI) and Viacom (NYSE: VIA-B). The combination of a modestly slowing ad market, tough comps, the reality that the ad market is cyclical, and the potential for elevated programming costs to maintain audience are the drivers b.ehind our downgrades and estimate reductions. We maintain Buy ratings on CBS and VIA.b."
"Although the strength in this year’s upfront has been modestly ahead of our expectations, the historical relationship between calendarized growth in upfront cost per thousand (CPM) increases and network ad growth is less than most would expect. A slowing 3Q scatter market, less pricing power and the potential for scatter over scatter to be down by 4Q11 or 1Q12 are causes for concern, and in our view, will translate to downward estimate revisions relative to consensus.
"On average, we are lowering our 2H11 and 2012 ad growth estimates by 100bps and 140bps, respectively. Due to the potential for programming cost pressure following ratings softness at some networks, our decremental margin assumption is in the 50-60% range."
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