Growth Potential from DirecTV’s Latin American Biz
DirecTV (NASDAQ:DTV) is the largest satellite TV provider that competes with pay-TV providers like Dish Network (NASDAQ:DISH), Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), Verizon (NYSE:VZ) and AT&T (NYSE:T). We currently have a Trefis price estimate of $38.53 for DirecTV’s stock, slightly below the current market price of $38.61.
Trefis members have created forecasts for two key drivers of DirecTV’s stock over the last week: (1) DirecTV LatAm TV Subscribers and (2) DirecTV LatAm Gross Profit Margin. The members’ forecasts suggest that DirecTV LatAm TV Subscribers and DirecTV LatAm Gross Profit Margin will mostly be in line with Trefis estimates. These projections indicate a combined upside of around 1% for DTV’s stock.
We estimate that LatAm Satellite TV accounts for around 8% of the $38.53 Trefis price estimate for DirecTV’s stock. Below are charts showing recent estimates created by Trefis members for the two drivers: (1) DirecTV LatAm TV Subscribers and (2) DirecTV LatAm Gross Profit Margin.
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1. DirecTV LatAm TV Subscribers
The average of forecasts for DirecTV LatAm TV Subscribers created by Trefis members indicated a projected increase from around 6 million in 2010 to close to 12 million by the end of the Trefis forecast period, in line with baseline Trefis estimates. The member estimates imply a small upside to the Trefis price estimate for DirecTV’s stock. In the past, DirecTV LatAm TV Subscribers has increased from around 2 million in 2004 to around 5 million in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of DirecTV’s stock to DirecTV LatAm TV Subscribers.
Our complete analysis for DirecTV LatAm TV Subscribers is here.
2. DirecTV LatAm Gross Profit Margin
The average of forecasts for DirecTV LatAm Gross Profit Margin created by Trefis members indicated a projected increase from 52.3% in 2010 to 53.2% by the end of the Trefis forecast period. In comparison, Trefis estimates the margin to remain constant at around 51.7% over the Trefis forecast period. The member estimates imply a small upside to the Trefis price estimate for DirecTV’s stock. In the past, DirecTV LatAm Gross Profit Margin has increased from 50% in 2003 to around 53% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of DirecTV’s stock to DirecTV LatAm Gross Profit Margin.