Nomura Securities Maintains a 'Neutral' on Discovery Communications (DISCA); Q4 Review
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Price: $24.43 --0%
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
12 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities maintains a 'Neutral' on Discovery Communications (NASDAQ: DISCA) price target of $46.00.
Analyst, Michael Nathanson, said, "While many of its peers posted soft ad growth and earnings helped by one-time items, Discovery did the opposite. Revenue growth was impressive, but it was offset by higher costs at both U.S. and international networks. As such, 4Q11 adjusted EPS of $0.64 (vs. $0.70 estimate) missed with only modest 8% EBITDA growth compared with the 12-17% growth in the first three quarters. The quarter was also filled with a few one-time items, which we expect to contribute to more confusion in 2012. Looking back over 2011, there are a number of lumpy issues that we expect to lead to messy compares in 2012. For starters, the digital catalog Netflix deal is the largest item leading to a difficult comparison in 3Q12 (without any further digital deals announced). However, this should be partially offset by easier programming expense comparisons in 2H12. Advertising trends remain very strong for the company, helped by its ratings success and growth at its emerging networks."
"We are reducing CY12E EPS by $0.11 to $2.80, which also adjusts for larger expected losses related to OWN. Flowing through these changes plus higher costs, our CY13E EPS decreases by $0.17 to $3.33."
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 $44.94 yesterday.
Analyst, Michael Nathanson, said, "While many of its peers posted soft ad growth and earnings helped by one-time items, Discovery did the opposite. Revenue growth was impressive, but it was offset by higher costs at both U.S. and international networks. As such, 4Q11 adjusted EPS of $0.64 (vs. $0.70 estimate) missed with only modest 8% EBITDA growth compared with the 12-17% growth in the first three quarters. The quarter was also filled with a few one-time items, which we expect to contribute to more confusion in 2012. Looking back over 2011, there are a number of lumpy issues that we expect to lead to messy compares in 2012. For starters, the digital catalog Netflix deal is the largest item leading to a difficult comparison in 3Q12 (without any further digital deals announced). However, this should be partially offset by easier programming expense comparisons in 2H12. Advertising trends remain very strong for the company, helped by its ratings success and growth at its emerging networks."
"We are reducing CY12E EPS by $0.11 to $2.80, which also adjusts for larger expected losses related to OWN. Flowing through these changes plus higher costs, our CY13E EPS decreases by $0.17 to $3.33."
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 $44.94 yesterday.
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