We downgrade our recommendation on
Liberty Global, Inc.
) to Underperform based on two factors (1) an extremely high-level
of current valuation of the company, and (2) precipitous
macro-economic fluctuations in the European region, which is the
core business area of the company.
Liberty Global reported mixed financial results for the first
quarter of 2012. Though revenue beats the Zacks Consensus Estimate,
net income fell below it. Moreover, business integration risks
persist as Liberty Global has recently acquired several related
With respect to our fiscal 2013 earnings estimate, the stock is
trading at 22.4x, a huge premium to both the S&P 500 average
and the industry average. We believe the stock is currently
overpriced and thus downgrade our rating to Underperform with a
target price of $42, based on 35.6x our fiscal 2012 earnings
LIBERTY GLBL-A (LBTYA): Free Stock Analysis
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