Time Warner (TWX) PT Raised to $95 at Wedbush

Wedbush analyst James Dix reiterated an Outperform rating and boosted his price target on Time Warner (NYSE: TWX) to $95.00 (from $91.00) following Q1 results and higher earnings growth outlook.

The firm sees FY 2015 EPS of $4.65 and raised FY 2016 EPS from $5.77 to $5.80.

The analyst highlighted:

• First, the ad market: core domestic cable TV ad demand similar in 2Q as 1Q.
• Second, 2Q EPS growth to decelerate on f/x and opex.
• Third, other hits and nits. Hits include: 1) after 1Q beat, given that 2015 f/x drag outlook was raised to $0.40 from ~$0.25 previously, guide in effect calls for ex-f/x EPS growth 3-4 percentage points higher (we estimate ~$400m in 2015 f/x OI drag, with $130m in 1Q, with biggest impact at Warner Bros. and Turner); 2) Turner has now completed renewals this cycle with 8 of the top-10 U.S. MVPDs, boosting confidence in its domestic affiliate fee growth outlook; 3) Turner international sub revenue was up over 10% ex-f/x; 4) Turner program expense should be up only 4- 5% in 2015, ex-charges (it was down 3% in 1Q); and 4) HBO sees no early signs of cannibalization of MVPD video bundles by HBO Now.

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

Shares of Time Warner closed at $85.45 yesterday.

You May Also Be Interested In

• JPMorgan Upgrades Aviva Plc (AV/:LN) (AIVAF) to Overweight
• Morgan Stanley Upgrades Oil India Ltd. (OINL:IN) to Equalweight
• Axis Capital Limited Downgrades Landmark Cars (LANDMARK:IN) to Add (2)