UPDATE: UBS Downgrades AMC Networks (AMCX) to Sell
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(Updated - July 15, 2016 8:44 AM EDT)
UBS downgraded AMC Networks (NASDAQ: AMCX) from Neutral to Sell with a price target of $57.00 (from $67.00).
Analyst Doug Mitchelson commented, "AMC Networks is a well-managed company, with good brands and locked-in traditional distribution that are likely to help sustain a reasonable market position nearterm. Still, with strong double-digit ratings declines for returning sophomore series' Better Call Saul and Fear the Walking Dead and lackluster ratings for freshman series Preacher and Feed the Beast, we are increasingly wary of AMCX's ability to diversify away from aging The Walking Dead. We do not see any near-term catalysts to resolve these concerns, and, in fact, would expect further declines in The Walking Dead ratings this fall to exacerbate the issue. Further, we expect a 2H16 deceleration in core national TV advertising sector growth (AMCX ~37% exposed), believe AMCX will not be included in Hulu's new online pay TV service (early 2017 launch) and expect that the cost of ramping its originals slate will precede monetization, suggesting difficulty growing margins. Lastly, we do not see media conglomerates interested in acquiring more traditional general entertainment cable network shelf space given the secular shift to IP streaming. While AMCX is certainly not expensive at 7.6x CY16 EV/EBITDA, we see it as slightly over-valued relative to our long-term earnings power concerns."
Shares of AMC Networks closed at $59.07 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Downgrades, Hot Downgrades
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