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TWX

Acquired by T

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Fox Corp.

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11:13
05/02/16
05/02
11:13
05/02/16
11:13

Analyst sees tepid growth for HBO, cuts Time Warner rating

Research firm Pacific Crest downgraded Time Warner (TWX) to Sector Weight from Overweight, saying that the stock is relatively expensive in light of HBO's tepid growth outlook. LUKEWARM GROWTH FORECAST: HBO should grow, "but not rapidly," wrote Pacific Crest analyst Andy Hargreaves. In order to grow outside of the pay TV ecosystem, HBO will have to make new investments which will cause its margins to drop before any growth is realized, the analyst stated. Meanwhile, Turner should benefit from increased affiliate fees in the medium term, but it will probably have to transform its programming in order to generate higher ad revenue, Hargreaves believes. Given the outlook at HBO and the stock's 40% jump off its lows, the shares look "relatively expensive," according to Hargreaves. After the success of Warner Bros' "Batman vs Superman" movie, expectations for the studio's upcoming movies based on DC Comics have increased, though successful launches of those movies are already priced into the stock, said Hargreaves. MORE BULLISH VIEW: On April 8, RBC Capital analyst Steven Cahall initiated coverage of CBS (CBS), 21st Century Fox (FOXA) and Time Warner with Outperform ratings, saying that all three companies are well-positioned in today's environment. CBS has "top notch content," while Fox's stock was undervalued and has strong international assets, the analyst wrote. Cahall was more upbeat on HBO than Hargreaves, saying that the channel's profit should be boosted by subscriber growth and overseas and Internet TV expansion. Moreover, Time Warner faces little risk from cord cutting, the analyst stated. WHAT'S NOTABLE: Hulu, which is owned by NBCUniversal (CMCSA), Fox and Disney (DIS), is developing a subscription service that would allow users to stream feeds from major broadcast and cable TV channels, the Wall Street Journal reported. PRICE ACTION: In morning trading, Time Warner rose fractionally to $75.21 per share.

TWX

Acquired by T

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FOXA

Fox Corp.

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CBS

Use VIAC, VIACA

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FOX

Fox Corp.

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CMCSA

Comcast

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CMCSK

Comcast

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DIS

Disney

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TWX Acquired by T
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05/02/16
Time Warner downgraded to Sector Weight from Overweight at Pacific Crest
04/08/16
On The Fly: Top five analyst initiations
04/08/16 RBC Capital
Time Warner initiated at RBC Capital
04/07/16 RBC Capital
Time Warner initiated with an Outperform at RBC Capital
FOXA Fox Corp.
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05/02/16 BTIG
WWE would make attractive acquisition or investment target, says BTIG
04/12/16 Piper Sandler
Teen survey shows Netflix still dominant, says Piper Jaffray
04/08/16 RBC Capital
21st Century Fox initiated at RBC Capital
04/07/16 RBC Capital
21st Century Fox initiated with an Outperform at RBC Capital
CBS Use VIAC, VIACA
/

+

04/08/16 RBC Capital
CBS initiated at RBC Capital
04/07/16 RBC Capital
CBS initiated with an Outperform at RBC Capital
04/01/16
TV viewing becoming more concentrated, says Pacific Crest
FOX Fox Corp.
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10/16/15 Barclays
Discovery downgraded to Equal Weight from Overweight at Barclays
CMCSA Comcast
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04/29/16 Goldman Sachs
DreamWorks upgraded to Neutral from Sell at Goldman
04/29/16
DreamWorks downgraded to Sector Weight from Overweight at Pacific Crest
04/28/16
DreamWorks takeover by Comcast would be logical, says Pacific Crest
CMCSK Comcast
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04/01/16 Piper Sandler
Rovi pullback an 'attractive' opportunity, says Piper Jaffray
12/23/15 JPMorgan
Rovi pact with AT&T increases chances for other renewals, says JPMorgan
DIS Disney
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04/18/16
On The Fly: Top five analyst upgrades
04/18/16 Pivotal Research
Disney upgraded to Buy from Hold at Pivotal Research
04/18/16 Piper Sandler
Jungle Book topped even most optimistic expectations, says Piper Jaffray

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