Greenfield ups News Corp analyst archive rich media to “sell” from “neutral” because “Avatar”
I know what you’re thinking: the fate of a large media corporation does not rise or fall based on a single film companies. What’s more, since stocks are typically priced in multiples of the expected value of discounted cash flows, for a movie to have an impact, would have to generate more profit or loss violently investors expected. Because Wall Street understands filmed entertainment that has become important only a small part of the global media company of a portfolio. And yet, the famous Pali Capital media analyst Rich Greenfield said their actionIt is also raising 2010 EPS forecast due to James Cameron, who leaves today at midnight.
You can complain about the unnecessary length of the film and a typical Hollywood ending, but the honest truth is that nobody in the world has ever seen a movie like AvatarHowever, the “chicken and egg” question (quality / quantity of 3D movie content with enough 3D screens to display a) has been permanently put to sleep in our mind, having seen last night is online . 3D cinema has been around for a long time, with the animation each time you use the media in recent years.
- Fox potential to generate a profit of Avatar is not clear due to its cost and if a film so closely associated with the 3D film will result in (2D-only) DVD / Blu sales in 2010 away. That said, do not walk away thinking that Fox is in danger of losing a huge amount of money on film
- Avatar (the best experience in a United States of 178 IMAX 3D screens or in the worst of traditional 3D displays 3000 + film premieres Friday) unleashed a new wave of 3D movies in the coming years and likely to accelerate consumer interest in 3D home (not so far as appears, only 2-3 years)
SELL Classification and Update Now Neutral -? Avatar will generate incredible excitement in the next month and will not be a disaster wise profit with Slate Fox film set to exceed the expectations of all this yearSo why give up the News Corp.
- It is estimated higher, superior results even without film. Our revised earnings estimates now assume high-teens growth in organic operating income in fiscal year (June) 2010, well above management guidance of high single to low double digit growth, albeit largely discounted population. Furthermore, we believe EPS $ 0.86 now, across the street consensus of $ 0.81 (our previous forecast was also above the consensus of $ 0.82)
Our However, with the highest revenue for a short miss FY11 revenue just feel useless- A short thesis had been based on the lack of growth subsequent to fiscal year 2010 (which we are still expecting FY11 EPS flat, even a higher) base.
Par-Commerce Esparza collapse still makes sense, long NWSA, NWS short – We continue to believe that there is no fundamental reason for a 17% spread to exist between actions and NWS NWSA, with the spread of an average of 12% since 1994 and only 6% from the address change was approved by shareholders in 2004 (18% is the highest of all time from change of address)
The main risks / Issues Short Term – not “fly” in return Avatar rational – American Idol ratings – especially considering the excess return on the FOX network during the first half of the 2009-2010 television season -. Relay brewing battle with Time Warner Cable. With strong balance sheet and is not interested in participating in repurchase, we believe News Corp. interested in pursuing strategic acquisitions (including the expansion of its distribution network, such as the purchase of BSkyB)Fox consent is talking a tough game, but TWC seems to be ready and willing to take Fox signs -. Procurement is.