CBS Network Sees Strong Results

CBS (NYSE:CBS) recently released Q1 2011 earnings, with an encouraging profit margin outlook that prompted an upgrade to our CBS stock price estimate, which now stands at $27.49. Below we take a look at the recent performance of the company’s U.S. broadcast TV network (the CBS Network). CBS competes with companies like Disney (NYSE:DIS), News Corp. (NASDAQ:NWS), Time Warner (NYSE:TWX) and Viacom (NYSE:VIA).

Our price estimate for CBS’ stock, at $27.49, is roughly in line with market price.

CBS Leading in Several Genres; We Expect Continued High Viewership

We estimate that the CBS Network constitutes about 16% of CBS’ stock value.

During the recent earnings announcement, CBS management commented: ^[1]

The CBS Television Network continues to be number one and the only network to be up in viewers this season. We have success across the board in every genre. We have the number one scripted series, the number one drama, the number one sitcom, the number one news sitcom, the number one news magazine and the number one most-watched scripted series every single night of the week. As we look into the future, our schedule is set up to succeed for a long time. ^[1]

In addition to this, management mentioned that the CBS Network (and broadcast networks in general) is continuing to draw viewership as a result of big event programming. Couple this with continued momentum in the advertising marketplace and things look bright for CBS. Overall we expect viewership to increase steadily in the years ahead, driven by the above-mentioned factors.

You can drag the trend line in the modifiable chart above to see how changes inaverage viewership can affect CBS’ stock value.

See our complete analysis for CBS’ stock here

1. CBS’s Q1 2011 earnings transcript, SeekingAlpha [↩] [↩]