“Disney+ is now at a $150 billion discount to Netflix based on our deconstruction, so we’re aggressive buyers,” Wells Fargo’s Steven Cahall said however.
Wells Fargo media analyst Steven Cahall told clients Tuesday that he believes Sinclair Broadcast Group’s regional sports networks could face a “tumultuous” period over the next few months, as uncertainty mounts concerning its upcoming carriage renewal with Dish Network and its ongoing battle with streamers YouTube TV and Hulu Live.
Wells Fargo Securities media analyst Steven Cahall initiated coverage of the cable distribution sector on Tuesday, citing the businesses’ strength in broadband service, but joining the growing chorus of analysts calling for Comcast to spin off its NBCUniversal programming unit. Cahall, who already covers cable programmers, initiated the sector with an “overweight” rating on Cable One and Charter; “equal weight” for Altice USA and “underweight” for Comcast.
“Smaller-scale services like Starz and AMC Networks’ might be better off folded into larger platforms,” writes Wells Fargo’s Steven Cahall.
The Walls Fargo analyst reaffirms her Outperform rating for the station group’s stock with a target of $85. “We could not be more bullish,” she writes to clients. “In our view, this mgmt. team is doing everything right — in terms of capital allocation, M&A strategy, core operations, you name it.”
After meeting with Scripps’ top manager yesterday, Marci Ryvicker and her team of Wells Fargo analysts sounded all positive notes in a report to clients. “We get the sense that business is trending better than the market would suggest,” they say.
That number represents a margin of 40% but significant growth of 8% annually. It is also looking at net retrans comprising 54% of EBITDA come 2021 (vs. 46% in ’17).
The securities research unit says the FCC incentive auction of broadcast spectrum is likely heading into more stages after the opening day forward auction in Stage 1 yielded just $8.5 billion in bids. The FCC needs $88.5 billion to cover the offers it made to broadcasters for the spectrum on the block and to cover associated administrative costs. “We still stick with our original analysis, which says that the forward auction will ultimately net anywhere between $27 billion and 38 billion,” it says.
Wells Fargo analysts Marci Ryvicker and Jennifer Fritzsche address questions as the FCC’s “forward” portion of its incentive auction approaches.
The proposed next-gen TV standard is endorsed by Wells Fargo securities analyst Marci Ryvicker and her S&P Global panelists: Sinclair’s David Amy and Nexstar’s Perry Sook. Said Ryvicker: “For me, I only see it as a good thing. I can’t put a cash flow on it. I can’t put a multiple on it. I just know it’s better than staying at 1.0.” Amy: “It will forever change the way viewers consume our product.” Sook said he was especially interested in the potential for datacasting.
Wells Fargo Securities says that Scripps, Gray and Tegna have the most to gain in political revenue this year from the expansion of presidential battleground states and the “hot” Senate, House and gubernatorial races.
Securities analysts led by Marci Ryvickers tell investors that following a meeting with the FCC, their earlier concerns over what the commission would do about sharing agreements have been allayed, and upgraded TV station group stocks to outperform.
Wells Fargo analyst Marci Ryvicker is raising her estimates for political ad spending from $4.9 billion to $5.2 billion. She upped her forecast based on television spending in August, which surged 77% on local TV to more than $171 million, compared to July. Local, network and cable TV are set to bring in $3.37 billion this election, boosting television revenue by more than 23% compared to last year. Local TV, at 54%, has the largest share of the three segments and is estimated to come in at $2.8 billion.