Nomura Securities Maintains a 'Reduce' on DIRECTV (DTV); Early NFL Promotion Raises Negative Subscriber Red Flags

Nomura Securities maintains a 'Reduce' on DIRECTV (NASDAQ: DTV) price target of $32.00.

Analyst, Mike McCormack, said, "DIRECTV started promoting a new offer, which will again offer the NFL Sunday Ticket free of charge for new subscribers. The announcement of a rich NFL Sunday Ticket promotion in mid-April is a bit surprising, given that the season starts in September. As we have previously written, we expect that U.S. net additions will be negative in 2Q11. In 4Q11, incremental margins were slightly negative, even though there were $1-$2 of non-cash ARPU timing benefits, which were related to 2011’s free Sunday Ticket promotion. We believe investors are paying a large premium for DTV’s buyback strategy and LatAm EBITDA growth story. We think that today’s change in promotions could be evidence of worsening US trends."

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

Shares of DIRECTV closed at $47.95 yesterday.

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