Imperial Raises Discovery, Inc (DISCA) PT To $37 On Model Change

Discovery, Inc (NASDAQ: DISCA)
Imperial Capital analyst, David Miller, reiterated his Outperform rating on shares of Discovery Communications (NASDAQ: DISCA) and raised his price target to $37 from $32 after switching his method of valuation to a dividend discount model despite estimates for both FY18 and FY19 remaining "essentially unchanged".

The analyst stated "our models suggest that in FY19, because of the lower interest expense profile as a result of debt pare-downs in FY18, and barring any kind of geopolitical incident or “black swan” event, DISCA could generate $2.63bn of FCF. If DISCA management merely took 10% of that FCF, or $263.0mn, and carved it out for the payment of a common dividend, that would equate to a $0.37/share dividend, or a 1.2% dividend yield based on DISCA closing price on 9/21/18 of $31.80, a yield more or less consistent with Walt Disney (DIS) and CBS Corporation (CBS)".

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

Shares of Discovery Communications closed at $31.80 yesterday.

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