CSFB buys bullish view on big media

Viacom garners top pick in media portfolio

Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom.

CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst Laura Martin left to head up Vivendi Universal’s investor relations team last year. The bank, with its new media point man, Bill Drewry, kicked off coverage of media giants AOL Time Warner, Disney, Fox and Viacom with the latter three all getting “buy” ratings. (AOL TW, a CSFB banking client, went unrated.)

Separately, MGM received a “hold” rating.

Viacom garnered the top pick in the media portfolio with a “strong buy.”

Drewry, CSFB’s former publishing analyst, was fairly restrained in his initial report on the “Big 4” entertainment names, which he notes under-performed an already weak S&P 500 on aggregate by 20% year to date.

Still, Drewry concluded that after the high EBITDA trading multiples of the 1997-2000 era, media stock multiples are now back to reality. He believes profit growth should return in 2003 and that Viacom should be the biggest beneficiary with a 12-month price target of $52, compared with today’s $38.86. He believes that most of the bad news in the media stocks is already embedded in the share prices, making companies like Disney (12 month target of $21) and Fox ($29) good buys.

“Despite all the turmoil to date, we believe that the excess has been mostly wrung out of the stocks,” Drewry wrote.

More Biz

  • Jack Ma Alibaba

    Alibaba Looking at Expansion in Advertising, Media Sectors

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • Mandatory Credit: Photo by AP/REX/Shutterstock (9178399b)Hillary

    Hillary Clinton Talks Russia, Trump, Putin and Midterm Elections at NYC Festival

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • Richard Simmons

    Prosecutors Charge Private Eye With Illegal Spying on Richard Simmons

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • Lionsgate General Counsel Left Amid Allegations

    Lionsgate General Counsel Left Amid Allegations of Sexual Abuse

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • 'Hammerhead' Takes Top Honors at New

    'Hammerhead' Takes Top Honors at New York Television Festival

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • Radiohead Coachella

    Radiohead Demands Answers in Drum Technician's Death

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

  • Kevin Durant LeBron James

    Kevin Durant Praises LeBron James' Lakers Move

    Credit Suisse First Boston picked a rather inauspicious time to recommence coverage of the “Big 4” entertainment companies Tuesday, initiating its research of the sector with an overweight rating, with cautious optimism that media shares have finally hit bottom. CSFB had largely ignored the platter of media and entertainment stocks since the bank’s star analyst […]

More From Our Brands

Access exclusive content