Maxim Group Reiterates a 'Buy' on Liberty Starz (LSTZA); Cutting PT as Combined Entities’ Valuation Methodology is More Complicated
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Price: $66.84 --0%
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
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Maxim Group reiterates a 'Buy' on Liberty Starz (NASDAQ: LSTZA), price target cut from $105 to $97.
Maxim analyst says, "Simplifying the tracking stock structure is positive – repositioning LSTZA with high cash/leveragability but few investment opportunities into Liberty (Nasdaq: LCAPA), which has plenty of use for the cash, such as building on its 21% position in Live Nation (NYSE: LYV)(Buy – $14PT) is also a smart move, in our opinion. However, we do not believe the merger is the final answer to the question that we posed in our last note (dated November 9, 2011): What is LSTZA’s role in the media and entertainment business, and which larger entity it should be part of?"
"There is much speculation as to how Liberty intends to manage its 40% investment in SIRI. It is possible that the block could be spun out to LCAPA shareholders. Another possibility is that SIRI could buy Liberty Media (an effective reverse takeover), thereby allowing SIRI’s $8B NOL to be used at a faster rate and Starz taxable income shielded. This is a fluid situation as SIRI should be buying stock back next year, which would automatically increase Liberty’s 40% stake if it does not tender."
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 $68.82 yesterday.
Maxim analyst says, "Simplifying the tracking stock structure is positive – repositioning LSTZA with high cash/leveragability but few investment opportunities into Liberty (Nasdaq: LCAPA), which has plenty of use for the cash, such as building on its 21% position in Live Nation (NYSE: LYV)(Buy – $14PT) is also a smart move, in our opinion. However, we do not believe the merger is the final answer to the question that we posed in our last note (dated November 9, 2011): What is LSTZA’s role in the media and entertainment business, and which larger entity it should be part of?"
"There is much speculation as to how Liberty intends to manage its 40% investment in SIRI. It is possible that the block could be spun out to LCAPA shareholders. Another possibility is that SIRI could buy Liberty Media (an effective reverse takeover), thereby allowing SIRI’s $8B NOL to be used at a faster rate and Starz taxable income shielded. This is a fluid situation as SIRI should be buying stock back next year, which would automatically increase Liberty’s 40% stake if it does not tender."
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 $68.82 yesterday.
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