Bet on Time Warner as It Hits New High - Analyst Blog
July 29 2013 - 6:00PM
Zacks
Shares of Time Warner Inc. (TWX) surged to
attain a new 52-week high of $63.05 on Jul 26, 2013, before closing
at $63.02. Shares of this Zacks Rank #3 (Hold) stock have generated
a year-to-date return of roughly 28%.
Based on the current price, this media and entertainment company
is 1.2% below the Zacks Consensus average analyst price target of
$63.81. The company currently trades at a forward P/E of 17.04x, a
1.3% discount to the peer group average of 17.26x. Additionally,
the company’s long-term estimated EPS growth rate is 10.8%.
We believe that Time Warner’s initiatives, such as foraying into
new markets, divestment activities and digital endeavors, would
augur well for its operating performance in the future. Moreover,
the company’s investments in programming, production and marketing
along with its focus on operating and capital efficiencies appear
to be encouraging.
Time Warner has been expanding its digital presence to allow
consumers to enjoy content on a wide range of platforms and
devices. We are optimistic about management’s expectations to
achieve low double-digit EPS growth in 2013.
Time Warner has been benefiting from its significant
international presence as it helped the company broaden its client
base and product portfolio. The company operates in the United
Kingdom, Germany, Canada, France, Japan and other countries besides
the United States.
Recently, it entered into a partnership with China’s leading
media and entertainment investment fund, China Media Capital. In
our view, this partnership complements the company’s strategy to
expand its presence in the Chinese entertainment market.
Moreover, Time Warner, with its strong content and
industry-leading portfolio of renowned brands is likely to benefit
from the largest and fastest growing Chinese media sector. In
recent years, China has emerged as an important market for media
and entertainment companies.
Apart from Time Warner, other stocks such as L Brands,
Inc. (LTD), GameStop Corp. (GME) and
Hanesbrands Inc. (HBI) achieved new 52-week highs
of $53.77, $45.85 and $59.85, respectively, on Jul 26, 2013.
GAMESTOP CORP (GME): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis Report
L BRANDS INC (LTD): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis Report
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