Target Set Higher for CBS Stock
With CBS Corp. stock having reached a 52-week high of $17.42 a share, analyst David Joyce of Miller Tabak + Co. has increased his target price for the stock to $21, which had been the analyst’s long-term target.
In a research note Thursday, Joyce calls CBS’ broadcast network the leader in the new TV season.
”CBS has not cancelled any new shows yet this season, as its peers have, so there is less risk of using ad inventory for make-goods,” he says. “Even with shifting the days and time slots of a number of successful shows such as Survivor, CSI: Miami and Big Bang Theory, overall [adults 18 to 49] ratings are +7%.”
Because the ad market continues to be strong in the fourth quarter, with prices 20% above upfront levels, CBS’ profit margins should strengthen, Joyce says.
At the same time, the company has been refinancing its debt at lower rates. That means “the prospect for a dividend increase could be improving,” he concludes.