We have maintained our long-term Neutral recommendation on
) with a target price of $56.00, as risk reward remains fairly
balanced at this juncture.
Why the Reiteration?
CBS Corporation is poised to benefit from its strategic
expansion initiatives. We expect its growth momentum to continue
in 2013 based on reverse compensation from affiliates, strong
demand of its content, digital distribution, syndication sales
and retransmission consent. CBS is eyeing around $1 billion in
retransmission and reverse compensation revenue by 2017. The
company also remains positive about CBS Television Network being
the growth driver.
Alongside, CBS continues to benefit from its streaming deals.
Thus, the company further strengthened its ties with
) by extending its multi-year streaming video deal for select
library content. Moreover, it entered into a deal with
). These measures facilitate CBS in monetizing its content.
The company also acquired the remaining 50% stake in TV Guide
Digital, including the TVGuide.com and TV Guide Mobile properties
Lions Gate Entertainment Corp
). The addition of TVGuide.com to CBS' impressive portfolio is
believed to be a major boost for the company's digital business
as both TVGuide.com and TV Guide Mobile enjoy a strong audience
in the lucrative TV information category.
Despite the fact that CBS is lowering its dependency on
advertising revenue, we believe the company remains extremely
vulnerable to the advertising market and operates in a highly
competitive industry. Moreover, secular headwinds remain a matter
of concern for broadcast-driven media companies.
AMAZON.COM INC (AMZN): Free Stock Analysis
CBS CORP (CBS): Free Stock Analysis Report
LIONS GATE ETMT (LGF): Free Stock Analysis
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