CBS (CBS) Q3 Results 'Positive', BMO Says

BMO Capital analyst Daniel Salmon reiterated an Outperform rating and $64 price target on CBS (NYSE: CBS) following Q3 EPS of $0.74, in-line with the firm's estimate and slightly above consensus of $0.73. Total revenue of $3.37B was also roughly in-line with their $3.30B and the Street’s $3.32B estimate. Segment OIBDA was ahead of expectations in Cable Nets and Local Broadcasting, while Entertainment and Publishing were below our estimates

Salmon views the results as positive. "As advertising tipped below half of revenue for the first time, there was a bevy of news and new details to support our view that CBS remains the best mix-shift story in media: 1) CBS will join Sony’s virtual MVPD; 2) six new owned shows (including NCIS New Orleans and CSI Cyber) are entering the syndication market; 3) the new 24-hour, digital news service, CBSN, will launch Thursday, and; 4) CBS will 100%-own The Late Show with Stephen Colbert and The Late Late Show with James Corden. While the first three are likely bigger headline-grabbers, the final point is an interesting one to us. Short-form content like late-night interviews and skits work very well on YouTube and late night hosts on competing networks like Kimmel/ABC and Fallon/NBC have helped re-introduce late night content to young audiences there; we’d look for the same from CBS next year. Finally, the bedrock of our thesis – retransmission and reverse retrans fees – got a qualitative boost as management noted they are “easily on track” to reach $1 billion in revenue by the time the company exits 2016 and even more confident in the $2 billion target for 2020."

The firm lowered 4Q14 EPS estimate to $0.81 from $0.88; 2015 goes to $3.73 from $3.78 and 2016 goes to $4.60 from $4.66.

For an analyst ratings summary and ratings history on CBS click here. For more ratings news on CBS click here.

Shares of CBS closed at $52.50 yesterday.

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