Corus Entertainment Inc T.CJR.B

TD

[retiredcf]

As posted, they raised their target from $7.50 to $9.00. GLTA

Corus Entertainment Inc.

(CJR.B-T) C$4.70

Great Start to Fiscal 2021

Event

Q1/21 results.

Impact: POSITIVE

Our estimates and target price have increased subsequent to revenue/profit beats in Q1/21 as well as encouraging new disclosure and commentary from management regarding future revenue trends. Please see page two for more detail on the results and on the growing percentage of TV segment revenue coming from higher growth digital/OTT/AdTech/content segments, as opposed to legacy linear advertising/ subscriptions. Our TV advertising revenue forecasts for future quarters remain unchanged (Exhibit 3). With the beat in Q1 (-14% Y/Y versus -16% expected), and with management signalling good results in December, we believe our estimate of -10% for Q2/21 could be conservative, but we prefer to err on the side of caution as more lockdowns occur.

TD Investment Conclusion

Now that we are 4.5 months into fiscal 2021, we are rolling forward our target price to 2022 estimates. With our EBITDA estimates recovering from the pandemic lows, and with consistent debt reduction, our target price for the equity keeps rising with the passage of time. We decided to offset some of this inflation by trimming our target multiple to 5.5x EBITDA from 5.75x (target equates to a 16% FCF yield on 2022E). U.S. comps trade higher and we believe the PMV of Corus would be much higher (if regulations ever allowed broader consolidation), but we will keep our multiple arguably conservative until we get more certainty on either post-pandemic business trends and/or modernization of the Broadcasting Act. With CJR.B shares still down 12% since the start of 2020, we reiterate our ACTION LIST BUY rating.

[Paddy902]

I certainly think once we clear $5 over the next few days, then getting to $6 won't take long.