Maxim Group Reiterates a 'Buy' on Liberty Starz (LSTZA); Recommences Stock Buyback Program
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Price: $66.84 --0%
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 20 | New: 20
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 20 | New: 20
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Maxim Group reiterates a 'Buy' on Liberty Starz (NASDAQ: LSTZA) price target of $105.00.
Maxim analyst says, "Starz recommenced repurchasing stock, buying back $50.7M of shares (at an average cost of $62.85) between August – October; ~$396M remains under its current share repurchase authorization. Following the buyback, LSTZA still has about $1B in net cash, nearly $20/share. LSTZA highlighted that the company would be comfortable with debt/EBITDA of 3x – implying an additional $1.5B plus buying power, which, combined with the $1B in cash, suggests that about 70% of the stock could be repurchased."
"Following management’s decision not to re-up with Netflix (Nasdaq: NFLX) at the end of Feb. 2012 due to premium brand concerns, it is unclear what will happen to LSTZA’s streaming rights to Disney (NYSE: DIS) through 2015 (movies till 2016) and Sony/Columbia through 2016 (movies till 2017). LSTZA has a new streaming deal with AT&T U Verse; we believe it is possible that Google (Nasdaq: GOOG)(NR) and Amazon (Nasdaq: AMZN)(NR) could emerge as buyers. We are still assuming about $50M in streaming EBITDA in 2012, making our $550M forecast ~$50M higher than consensus. This suggests that any deal would be a positive surprise. We’ll review our model after the Nov. 17 Liberty analyst meeting."
For an analyst ratings summary and ratings history on Liberty Starz click here. For more ratings news on Liberty Starz click here.
Shares of Liberty Starz closed at $68.07 yesterday.
Maxim analyst says, "Starz recommenced repurchasing stock, buying back $50.7M of shares (at an average cost of $62.85) between August – October; ~$396M remains under its current share repurchase authorization. Following the buyback, LSTZA still has about $1B in net cash, nearly $20/share. LSTZA highlighted that the company would be comfortable with debt/EBITDA of 3x – implying an additional $1.5B plus buying power, which, combined with the $1B in cash, suggests that about 70% of the stock could be repurchased."
"Following management’s decision not to re-up with Netflix (Nasdaq: NFLX) at the end of Feb. 2012 due to premium brand concerns, it is unclear what will happen to LSTZA’s streaming rights to Disney (NYSE: DIS) through 2015 (movies till 2016) and Sony/Columbia through 2016 (movies till 2017). LSTZA has a new streaming deal with AT&T U Verse; we believe it is possible that Google (Nasdaq: GOOG)(NR) and Amazon (Nasdaq: AMZN)(NR) could emerge as buyers. We are still assuming about $50M in streaming EBITDA in 2012, making our $550M forecast ~$50M higher than consensus. This suggests that any deal would be a positive surprise. We’ll review our model after the Nov. 17 Liberty analyst meeting."
For an analyst ratings summary and ratings history on Liberty Starz click here. For more ratings news on Liberty Starz click here.
Shares of Liberty Starz closed at $68.07 yesterday.
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