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AMC Networks (AMCX) has a very bullish Chaikin Power Gauge stock rating and reported very strong earnings before the opening last Monday, May 4. AMCX reported a very strong 1st quarter that was aided by strong advertising revenue and the popularity of their original programming. The company earned $1.66 vs. estimates of $1.48 in the 1st quarter. Revenue also beat analyst estimates.
AMCX spiked up to $81.14 on Tuesday before profit taking set in. It closed the week at $76.25 and represents an attractive buy at current levels. Nomura Securities reaffirmed their buy rating on Tuesday and upped their price target for AMCX to $90 based on their strong 1st quarter earnings report.
AMC Networks owns a number of cable networks including AMC, IFC, Sundance Channel and they recently acquired a 49.9% stake in BBC America. Historically AMCX has struggled to produce consistently popular original programs. That has all changed with the success of the soon to end Mad Men and the wildly popular Walking Dead. AMCX also had this year’s best new cable series, Better Call Saul, a Breaking Bad spin-off.
AMCX is starting to leverage the synergies of its various cable properties by showing some original episode content on multiple channels, using these one off events to highlight shows and generate additional advertising revenue.
Piper Jaffrey recently recommended AMCX, calling it “one of the best content plays in the media space.” They have a price target of $90 a share vs. Friday’s close of $76.25 AMC Networks has bested Wall Street estimates by 10% in their last 3 quarterly reports, reversing a string of earnings disappointments. Rising analyst estimates will follow last Monday’s bullish earnings surprise.
AMC Networks’ very bullish Chaikin Power rating is driven by strong earnings growth, analysts revising their estimates and ratings higher as well as very strong performance of the Media group. There is a relatively large short position in AMCX that could provide buying demand as analysts raise estimates based on their very strong 1st quarter results that beat Wall Street earnings estimates.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
