* Raises price target to $37 from $36
* Says margin outlook at Turner Networks has become
incrementally better
* Says unscripted shows reduces content cost pressure
June 11 (Reuters) – Bernstein Research upgraded Time Warner
Inc to “market perform” from “under perform,” saying the
margin outlook at its Turner Networks division has improved
incrementally after it added unscripted shows to its programming
mix.
At Turner’s upfronts last month, Time Warner unveiled an
ambitious line-up of new series at TBS and TNT for the 2012-2013
season, the brokerage said, referring to the broadcaster’s pitch
to advertisers for the upcoming TV season.
“The cost of unscripted programming, while no longer as low
as popularly perceived, is still far less than high quality
scripted dramas and comedies,” analyst Todd Juenger wrote in a
note.
The introduction of unscripted shows reduces content cost
pressures and they can sometimes generate audiences just as big
and attractive and loyal as original scripted programs, analyst
Juenger said, raising his price target on the stock by $1 to
$37.
Todd Juenger is rated three stars by Thomson Reuters
StarMine for the accuracy of his earnings estimates on Time
Warner.
Time Warner also owns cable networks CNN and HBO, several
publications and the Warner Bros. movie studio.
The brokerage also expects Time Warner to benefit from a
dearth of blockbusters this summer. The company’s next Batman
movie, “The Dark Knight Rises,” is slated for a July release.
“We don’t believe that one blockbuster film should have a
significant impact on investors’ decision to buy a stock, but it
adds nice protection to FY12 earnings,” Juenger said.
Shares of the New York-based company were trading at $35.45
in Monday morning trade on the New York Stock Exchange.
(Reporting by Supantha Mukherjee in Bangalore; Editing by
Supriya Kurane)
