Goldman Sachs maintained a Conviction Buy on Liberty Global (NASDAQ: LBTYA) with a price target of $53.00. Comments follow Q1 results.

"We expect the stock to react positively and reiterate our CL Buy," said Analyst Tim Boddy. "Improving trends reconfirm Liberty’s attractive structural positioning after a number of ‘one-off’ pressures combined to weigh on growth in 2013: (1) In the UK, VMED’s 6.7% price rise in February has had only a marginal impact on customer churn (13.9% vs. 13.7% in 1Q’13) and overall customer/ RGU growth improved materially. Mobile returned to growth (+9% yoy underlying) aided by the iPhone, while Business revenues grew sequentially and declined only 1% yoy on an underlying basis, with further contract wins supporting management’s goal of a 2H recovery. OCF growth of 6% reflected cost-cutting gains."

"From May 1 the government has started charging VAT on prepaid line-rental offers, creating a c.$8 mn monthly drag on sales/OCF, although we estimate this drag should ease sharply in 2015 as these offers (usually 12-18 months) start to expire. Despite this, VMED still expects to grow OCF mid-single digits in 2014. (2) In Germany revenue growth of 7% (adjusted for one-offs) recovered from 4Q (+5%); OCF growth accelerated to 12% (underlying) vs. +9% aided by higher prices. RGU growth moderated slightly, reflecting the continued successful focus on value over volume. (3) Netherlands showed early signs of recovery, with sequentially better KPIs and moderating financial declines, and we note KPN raised fixed prices by 2% yesterday; with much easier comparisons ahead, we believe management commentary that this market will remain ‘challenging’ is conservative. (4) The shift back to an MNVO model continues to boost VTR, however OCF growth slowed to 14% (vs. 28% in 4Q) on higher US$ content costs," he added.

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Shares of Liberty Global closed at $42.69 yesterday.