Nomura Securities on U.S. Media: Q1 Earnings Preview
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Rating Summary:
23 Buy, 4 Hold, 2 Sell
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Up: 13 | Down: 14 | New: 11
Rating Summary:
23 Buy, 4 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities on U.S. Media
Nomura analyst, Michael Nathanson, said, "When we launched coverage on U.S. media in the Fall last year, we were bullish on the sector for four critical reasons: 1) A material advertising slowdown off of rocky 2009 levels was unlikely, 2) Over-thetop worries were overblown, 3) Affiliate fees would continue to be healthy, and 4) Valuations were very attractive."
"While the market’s forward multiple has increased by 8% since late September, the majority of our universe has seen more significant reratings. The biggest expansion has been witnessed at News Corp. (Nasdaq: NWSA) (up 27%), Viacom (NYSE: VIA) (up 19%), CBS (NYSE: CBS) (up 21%) and Disney (NYSE: DIS) (up 15%). Time Warner (NYSE: TWX) has essentially moved with the market multiple while Discovery (Nasdaq: DISCA) and Scripps Networks (NYSE: SNI), on the other hand, have both seen multiples contract by 17% and 3%, respectively."
"We would use this potential pause in momentum to add to select names. Of the four buy rated stocks, three – Disney, News Corp. and Viacom – still have more than 15% variance vs. our target price...For calendar 1Q11 earnings, we are raising our EPS estimates for Viacom and Discovery (below the line adjustments) and lowering our Scripps Networks and Time Warner estimates. For the quarter, we are above consensus at CBS, Viacom, Scripps Networks and Discovery."
Nomura analyst, Michael Nathanson, said, "When we launched coverage on U.S. media in the Fall last year, we were bullish on the sector for four critical reasons: 1) A material advertising slowdown off of rocky 2009 levels was unlikely, 2) Over-thetop worries were overblown, 3) Affiliate fees would continue to be healthy, and 4) Valuations were very attractive."
"While the market’s forward multiple has increased by 8% since late September, the majority of our universe has seen more significant reratings. The biggest expansion has been witnessed at News Corp. (Nasdaq: NWSA) (up 27%), Viacom (NYSE: VIA) (up 19%), CBS (NYSE: CBS) (up 21%) and Disney (NYSE: DIS) (up 15%). Time Warner (NYSE: TWX) has essentially moved with the market multiple while Discovery (Nasdaq: DISCA) and Scripps Networks (NYSE: SNI), on the other hand, have both seen multiples contract by 17% and 3%, respectively."
"We would use this potential pause in momentum to add to select names. Of the four buy rated stocks, three – Disney, News Corp. and Viacom – still have more than 15% variance vs. our target price...For calendar 1Q11 earnings, we are raising our EPS estimates for Viacom and Discovery (below the line adjustments) and lowering our Scripps Networks and Time Warner estimates. For the quarter, we are above consensus at CBS, Viacom, Scripps Networks and Discovery."
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