Piper Jaffray Reiterates Overweight on Rovi Corp. (ROVI) Following AT&T/DTV License Agreement
Piper Jaffray reiterated an Overweight rating and $26.00 price target on Rovi Corp. (NASDAQ: ROVI) following the company's announced seven-year patent license agreement with AT&T/DTV. The license agreement builds upon the already existing agreement between the companies. Piper Jaffray said that Rovi's announcement this morning is a significant win ahead of deals with both Comcast and Dish Network ending in the next several months.
Analyst Michael Olson commented, "Rovi announced a seven-year patent license agreement with AT&T/DTV that extends the existing agreement between the companies. We think this deal provides evidence of the validity of Rovi's core IPG patents and increases our confidence in the company successfully negotiating deals with Comcast and DISH in early '16. Rovi mgmt had previously indicated that it has moved beyond the "patent validity" stage of negotiations and into the "economic" stage with all three major service providers and we now know that this was clearly the case with AT&T/DTV. While the July loss to Netflix raised concerns around these potential renewals with AT&T/DTV (Jan-16), Comcast (Feb-16), and Dish Network (Mar-16), we believe the renewals of AT&T/DTV (today), Charter (April), and Sky (October), among others, point to a high likelihood of renewal for Comcast and DISH. Maintain OW and $26 PT."
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Shares of Rovi Corp. closed at $14.66 yesterday.