Wall Street is waking up to David Letterman.
Media analysts credited the Eye Web’s new latenight talkshow host for an incredible $ 19-a-share surge in CBS stock on Wednesday.
The 7.7% rise from the previous day brought the network to $ 266, a new high for the year in Big Board trading.
Volume reached 144,100 shares traded, well above its average volume of 49,125 shares.
Based on ratings for his first two shows, media analysts said the comedian lured away from NBC for a reported $ 14 million annually would invigorate CBS’ latenight schedule.
“Late Show With David Letterman” earned an 8.3 rating/25 share in its second airing on Tuesday, a 137% advantage over the 3.5/10 garnered by NBC’s “The Tonight Show With Jay Leno.” Letterman retained 76% of the audience from his heavily hyped opening-night mark of 10.9/32.
In key demos, Letterman outperformed Leno by 393% in men 18-34 (6.9 vs. 1.4), 313% in men 18-49 (6.2 vs. 1.5) and 217% in men 25-54 (5.7 vs. 1.8).
The new CBS show held its biggest household lead over Leno in the top-five markets.
Barry Kaplan, who follows CBS for Goldman Sachs & Co., told clients he was raising his earnings estimates for CBS by 50 cents a share for this year and for 1994, partly because of reassessment of how much extra revenue Letterman may generate from commercial sales for the network.
Kaplan said he now expects Letterman will maintain ratings of about 4.5 for the full year, and said that would mean an extra $ 30 million in after-tax earnings for CBS in 1994.