Maxim Group Reiterates a 'Buy' on Liberty Starz (LSTZA); Positive Subscriber and Cash Flow Increase; Raising 2011/12 Estimates

Maxim Group reiterates a 'Buy' on Liberty Starz (NASDAQ: LSTZA) price target of $105.00.

Maxim analyst says, "Starz reported EBITDA of $118M (+10% y/y) versus our estimate of $102M, and consensus estimates of $110.3M. Critically, total Starz/Encore subs increased 6% y/y to 52M, in line with our estimated 6% growth rate. Starz now has 19M subscribers, up 11% y/y; Encore has 32.9M subscribers, up 3% y/y."

"We are increasing our estimated FY11 Starz EBITDA to $473M, up from $456M and 14% above the prior year’s $415 million. We are also raising our FY12 EBITDA estimates to $560M (+18% y/y), from $535M. We are modeling streaming revenue of about $83M in 2012, up from the current estimate of $30M that Netflix (Nasdaq: NFLX) (NR) is paying for FY11. It is possible that a far higher number – given that NFLX has been paying up to $200M for a new series and has acknowledged that $200M would not be surprising. We are also raising our LSTZA operating expenses for FY11 to $936M, up 23% y/y from our prior estimates of $887M, due to higher programming spends."

For more ratings news on Liberty Starz click here and for the rating history of Liberty Starz click here.

Shares of Liberty Starz closed at $67.03 yesterday.

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