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CBS and Scripps Big Gainers Ahead of Earnings Season - Broadcasting & Cable

CBS and Scripps Big Gainers Ahead of Earnings Season

Morgan Stanley sees room for revenue growth
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CBS Corp. and Scripps Networks Interactive were the big
gainers on Monday (Feb. 1), beating the market for the day. CBS' share price
rose 2.78% to $13.29 thanks to a range of positive data points including an
upbeat report from Morgan Stanley. After trending downwards in the morning, CBS'
share price began to zoom around noon after the network began alerting news
media it had sold out of Super Bowl ad spots for this Sunday's broadcast. The
network also reported a 35% ratings gain for Sunday night's broadcast of The
Grammys. Separately, Scripps also rose 2.18% to $43.63. The company said today
it was launching a major merchandise push, putting the HGTV name to a line of
Serta mattresses.

Media stocks were generally up, with the exception of Walt
Disney Co. down slightly on Friday's close, finishing Monday at $29.52, down
0.10%. Morgan Stanley's media analyst, Benjamin Swinburne, issued a new report
on media Feb. 1, predicting 4% ad growth in 2010 with automotive and political
ad dollars accounting for 50% of that increase.

Local TV stations stand to gain the most from political.  Swinburne wrote in the report, "We estimate
that 70%-75% of political ad dollars are spent on local TV."  Swinburne is expecting a 30% increase in
revenue at Scripps for 2010; 7% growth in revenue at Discovery and 4% revenue
growth at CBS. Morgan Stanley expects CBS Corp. earnings per share will rise
40% by 2012, by far the largest projection of any media company covered by the
bank. Swinburne raised the CBS share price target from $16 to $17 and believes
CBS will begin to receive retransmission dollars from its stations in 2011.

Across the wider market, the Dow closed up 1.17%, while
S&P was up 1.43% and the Nasdaq rose 1.11%. Quarterly earnings for large
cap media stocks kick off with News Corp. tomorrow, Feb. 2, beginning at 4.30
p.m.

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