Wells Fargo Upgrades CBS (CBS) to Outperform

Wells Fargo upgraded CBS (NYSE: CBS) from Market Perform to Outperform and raised its valuation range to $58-60 from $48-50.

Analyst Marci Ryvicker commented, "We upgrade CBS to Outperform – why wait for the March 15th investor day? It’s no secret we have a positive bias towards broadcast (recall our favorite small and mid-cap names - GTN and SBGI, respectively) given strong ad trends, our view that broadcast will be part of any successful skinny bundle, and the continuously better-than-expected net retrans figures. The only reason we downgraded CBS back on 8/18/15 was because we were tired of lowering our numbers time and time again. Fast forward to today -- we have a lot more clarity on the core business and feel like there is not only stabilization in ests. – but there might actually be upside for ‘16 and beyond. From where, you might ask? Strong ad trends, what is likely to be a healthy upfront, a more accurate measurement system (Nielsen’s Total Audience Measurement), an accretive NFL deal, and MUCH better monetization of Showtime. Where our thesis is still a little shaky is in traditional syndication and SVOD (Subscription Video-On-Demand) – this is where we hope to get some much needed comfort and clarity come 3/15. Our gut tells us it’s time to get involved here again – and would do so BEFORE next Wed.; hence, we upgrade to 1 from 2 and raise our val range to $58-60 from $48-50."

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

Shares of CBS closed at $51.18 yesterday.

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