Time Warner Inc (NYSE: TWX) reported robust 2Q16
results, with the EPS
beating expectations. The company also raised its FY16 EPS guidance.
Goldman Sachs’ Drew Borst reiterated a Buy rating on the company, while raising the price target from $87 to $89.
Beat And Raise
Time Warner reported its 2Q16 EPS at $1.29, ahead of the estimate and the consensus, with half the beat being driven by
better-than-anticipated operating income at HBO and Warner Bros. and the other half by below-the-line items, including tax.
The company also raised its EPS guidance for 2016 from $5.35 to $5.45.
HBO
“We continue to believe that TWX will benefit from a favorable content cycle at Warner Bros., and HBO’s OTT initiatives and
improving rates for HBO on approaching renewals,” Borst mentioned.
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Times Warner, Impresses Investors With Q3 Report
HBO helped the 2Q beat with better-than-expected subscriber revenue growth of 6 percent, largely from higher HBO Now
subscribers.
Borst expects HBO’s subscriber revenue growth to continue through the year-end, driven by new content.
Hulu
The analyst believes Time Warner’s 10 percent investment in Hulu boosts the latter’s efforts to compete against larger OTT
competitors.
“Ensuring competitive balance in the OTT space should be a strategic imperative for all media incumbents, including TWX,” Borst
stated.
In addition, Turner is expected to get broader network carriage through Hulu’s upcoming virtual MVPD service. Borst believes
Turner is well positioned to weather the digital transition.
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Latest Ratings for TWX
Date |
Firm |
Action |
From |
To |
Jul 2016 |
FBR Capital |
Downgrades |
Outperform |
Market Perform |
Jul 2016 |
|
|
|
|
May 2016 |
Goldman Sachs |
Maintains |
|
Buy |
View More Analyst Ratings for
TWX
View the Latest Analyst Ratings
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