Nomura Securities on U.S. Cable and Satellite: Video Trends Disappoint as Q1 a Mixed Bag
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3 Buy, 11 Hold, 2 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on U.S. Cable and Satellite: Video Trends Disappoint as Q1 a Mixed Bag
Analyst, Mike McCormack, said, "As we progress into the seasonally weak second quarter, we expect the Pay TV group to take a summer breather, before an increased capital returns story emerges later in the year. Within the industry, we continue to favor Time Warner Cable among the group."
McCormack's Top Ideas for the quarter include: Time Warner Cable (Nasdaq: TWTC) and DirecTV (NYSE: DTV). The Nomura analyst feels TWC's valuation is discounted versus peers and stability will push incremental capital returns. For DTV, he sees investors discounting risks too much.
Several themes have become the focus in the industry including: 1) Video subscribers should have been better; 2) Pricing now a concern; 3) Programming expense chugging along, but cable revenue growth is stable; 4) 2Q seasonality likely as bad as 2011; and 5) Telcos appear less disruptive: Verizon (NYSE: VZ) signaled for higher FiOS pricing and reconfigured bundles to come in 2H11, which should create a less competitive environment for cable peers, specifically Cablevision (NYSE: CVC).
Analyst, Mike McCormack, said, "As we progress into the seasonally weak second quarter, we expect the Pay TV group to take a summer breather, before an increased capital returns story emerges later in the year. Within the industry, we continue to favor Time Warner Cable among the group."
McCormack's Top Ideas for the quarter include: Time Warner Cable (Nasdaq: TWTC) and DirecTV (NYSE: DTV). The Nomura analyst feels TWC's valuation is discounted versus peers and stability will push incremental capital returns. For DTV, he sees investors discounting risks too much.
Several themes have become the focus in the industry including: 1) Video subscribers should have been better; 2) Pricing now a concern; 3) Programming expense chugging along, but cable revenue growth is stable; 4) 2Q seasonality likely as bad as 2011; and 5) Telcos appear less disruptive: Verizon (NYSE: VZ) signaled for higher FiOS pricing and reconfigured bundles to come in 2H11, which should create a less competitive environment for cable peers, specifically Cablevision (NYSE: CVC).
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