Expected Price Gains for Network and Cable TV Operators (CBS, DIS, CMCSA, TWC, DISH, DTV, VIA, LSTZA, DISCA, CHTR)

There are plenty of challenges facing the network and cable TV industry these day, not the least of which is the growth in streaming video. The well-known troubles of Netflix Inc. (NASDAQ: NFLX) to one side for a moment, the market for streaming is growing, while some cable operators are losing subscribers. Broadcast networks with content to license are better placed to profit, while cable operators with their own spectrum might be in the best position of all, at least in the near term.We’re looking today at 10 companies with broadcast or satellite/cable businesses (or both): CBS Corp. (NYSE: CBS), Walt Disney Co. (NYSE: DIS), Comcast Corp. (NASDAQ: CMCSA), Time Warner Cable Inc. (NYSE: TWC), Dish Network Corp. (NASDAQ: DISH), DIRECTV (NASDAQ: DTV), Viacom, Inc. (NYSE: VIA), Liberty Starz Group (NASDAQ: LSTZA), Discovery Communications Inc. (NASDAQ: DISCA), and Charter Communications Inc. (NASDAQ: CHTR).

All data from Yahoo! Finance and current stock prices were gathered about noon today.

CBS Corp. (NYSE: CBS) has a median target price of $31.00 from 22 brokers. Shares are trading today at $25.66, for an implied gain of $5.34, or 21%. CBS’s forward P/E is 11.62 and the company pays a dividend yield of 1.6%. The stock’s 52-week trading range is $15.99-$29.68, and at today’s price that’s about 60% above its 52-week low, posted earlier this morning, and 14% below the 52-week high. CBS is scheduled to release third-quarter earnings on Thursday. The consensus EPS estimate is $0.46 on revenue of $3.43 billion. A year ago the company posted sales of about $3.3 billion and last quarter revenue totaled nearly $3.6 billion. There’s room for the share price to rise, but neither the 52-week high nor the target price are endangered in the near term.

Walt Disney Co. (NYSE: DIS) has a median target price of $40.00 from 24 brokers. Shares are trading today at $35.34, for an implied gain of $4.66, or 13%. Disney’s forward P/E is 12.28 and the company pays a dividend yield of 1.1%. The stock’s 52-week trading range is $28.19-$44.34, and at today’s price that’s about 25% above its 52-week low, posted earlier this morning, and 20% below the 52-week high. Disney is much more than a distribution channel. Its ability to create compelling content and then license it for further distribution is practically equal to a license to print money. Analysts expect EPS of $0.54 on revenue of $10.36 billion when Disney reports third-quarter earnings next week.

Comcast Corp. (NASDAQ: CMCSA) has a median target price of $30.00 from 24 brokers. Shares are trading today at $23.60, for an implied gain of $6.40, or 27%. Comcast’s forward P/E is 12.35 and the company pays a dividend yield of 1.9%. The stock’s 52-week trading range is $19.19-$27.16, and at today’s price that’s about 23% above its 52-week low, posted earlier this morning, and 13% below the 52-week high. Comcast owns both content and the fat pipes to distribute that content. Because distribution of streaming content is fast becoming a commodity, it’s Comcast’s NBCUniversal media business that will carry Comcast forward. The $30 target price is probably safe for a while, but the company’s 52-week high could be in the sights.

Time Warner Cable Inc. (NYSE: TWC) has a median target price of $85.00 from 22 brokers. Shares are trading today at $62.91, for an implied gain of $22.09, or 35%. Time Warner’s forward P/E is 11.25 and the company pays a dividend yield of 3.1%. The stock’s 52-week trading range is $47.89-$79.21, and at today’s price that’s about 31% above its 52-week low, posted earlier this morning, and 21% below the 52-week high. In its last quarter, Time Warner lost subscribers and posted lower profits. The company believes it will make its forecast annual profit, but warned that advertising was falling. It’s easy for subscribers to drop cable subscriptions in a tight economy, and as the holidays come round, dropping cable service to have a few more bucks to spend on gifts will occur to a lot of viewers.

Dish Network Corp. (NASDAQ: DISH) has a median target price of $32.00 from 18 brokers. Shares are trading today at $24.11, for an implied gain of $7.89, or 33%. Dish Network’s forward P/E is 8.38 and the company pays no dividend. The stock’s 52-week trading range is $17.95-$32.56, and at today’s price that’s about 34% above its 52-week low, posted earlier this morning, and 26% below the 52-week high. Dish reports earnings next week, and the consensus estimates for EPS and revenue are $0.73 and $3.65 billion, respectively. The EPS estimate has risen since the end of last quarter, but Dish’s subscriber base generally claims lower-income households, which would be among the first to let subscription service go if the economy does not pick up.

DIRECTV (NASDAQ: DTV) has a median target price of $55.00 from 19 brokers. Shares are trading today at $45.58, for an implied gain of $9.42, or 21%. DIRECTV’s forward P/E is 10.78 and the company pays no dividend. The stock’s 52-week trading range is $39.12-$53.40, and at today’s price that’s about 17% above its 52-week low, posted earlier this morning, and 15% below the 52-week high. DIRECTV reports earnings on Thursday, and analysts are looking for EPS of $0.73 on revenue of $6.74 billion. The EPS estimate has fallen from $0.75 in the past month, as worries about subscriber numbers surface. The company’s pure distribution model could be a weakness going forward.

Viacom, Inc. (NYSE: VIA) has a median target price of $57.00 from 28 brokers. Shares are trading today at $53.99, for an implied gain of $3.01, or about 6%. Viacom’s forward P/E is 12.65 and the company pays a dividend yield of 1.8%. The stock’s 52-week trading range is $42.37-$60.90, and at today’s price that’s about 27% above its 52-week low, posted earlier this morning, and 11% below the 52-week high. Viacom is set to report earnings next week and the consensus estimates are EPS of $1.03 on revenue of $3.74 billion. The stock is near its target price, reflecting the relative strength of the content makers compared with the distribution companies.

Liberty Starz Group (NASDAQ: LSTZA) has a median target price of $91.00 from 11 brokers. Shares are trading today at $67.66, for an implied gain of $23.34, or about 35%. Starz’s forward P/E is 12.16 and the company pays no dividend. The stock’s 52-week trading range is $59.01-$81.36, and at today’s price that’s about 15% above its 52-week low, posted earlier this morning, and 17% below the 52-week high. Liberty Starz is expected to post EPS of $1.08 for the third quarter, a full dime above estimates at the end of last quarter. The company has shown a willingness to play hardball with Netflix and other distribution channels, which is good for Liberty provided their content quality stays high.

Discovery Communications Inc. (NASDAQ: DISCA) has a median target price of $46.00 from 20 brokers. Shares are trading today at $43.24, for an implied gain of $2.76, or about 6%. Discovery’s forward P/E is 15.3 and the company pays no dividend. The stock’s 52-week trading range is $34.75-$45.81, and at today’s price that’s about 24% above its 52-week low, posted earlier this morning, and 6% below the 52-week high. Discovery reports earnings tomorrow, and is expected to post EPS of $0.55 on revenue of $1.01 billion. The company recently hired an experienced on-line executive to handle distribution of its programming through streaming outlets like Netflix and Amazon.com (NASDAQ: AMZN). This is another one that could bust through its target price and 52-week high, especially if the quarterly report is good.

Charter Communications Inc. (NASDAQ: CHTR) has a median target price of $66.00 from 9 brokers. Shares are trading today at $46.95, for an implied gain of $19.05, or about 41%. Charter’s forward P/E is 32.41 and the company pays no dividend. The stock’s 52-week trading range is $31.75-$61.15, and at today’s price that’s about 48% above its 52-week low, posted earlier this morning, and 23% below the 52-week high. Charter is expected to post an EPS loss of -$0.10 when it reports earnings tomorrow. Revenue is expected to come in at $1.8 billion. As a pure-play distribution company, Charter shares the disadvantages of Dish and DIRECTV.