Oppenheimer & Co. analyst Jessica Reif upgraded her rating of King World Prods. Inc. to “buy” from “market performer” yesterday, mostly due to KW’s strong positioning against its competition.
The analyst has established a 6- to 12-month stock price target of $ 36.
Reif attributed her expectations for stronger earnings for fiscal 1994 to a variety of factors, particularly the popularity of its TV slate, which includes “Wheel of Fortune” and “Oprah.”
“No new TV show this season competes with King World shows,” she said, citing the failure of “You Bet Your Life” to attract a strong audience. “Compared to the competition, the company is stable and focused,” she said.
Moreover, she expects that the company’s two new shows, “American Journal” and “Les Brown,” could contribute an additional $ 10 million to pre-tax profits in fiscal 1994. Both shows have captured “unusually” strong clearances and higher licensing fees than expected, with stations bidding for the shows in some parts of the country, she added.
Reif also said the company could embark upon a stock buyback program in the open market in the next six to nine months.
In a down market, King World shares closed down 38 cents at $ 28.75 on NYSE-composite volume of 141,300 shares, compared with average daily volume of 59,000.