The results of the last quarter added strength to the uptrend and the stock is now more than 50% up on a 52 week basis. On a longer term, it has been a multi-bagger with exceptional returns over the last 4 years. The net income has multiplied by more than 7 times from $226 million (2009) to $1.634 billion (2012). Even in the last quarter, there was a good 24% growth in EPS with a 6% growth in revenues. Amongst the analysts, Bank of America Merrill Lynch has the highest price target of $60 for the stock. The stock is now trading at 19 times ttm earnings and around 14 times forward earnings. The PEG ratio is also around 1.3 which indicates reasonable expectations of growth in the next few years. The entertainment segment contributes maximum to the revenues, and in last quarter it contributed $2.5 billion out of the $4 billion. The segment contributed $480 million to the OIBDA of $916 million. The cable network, which has the Showtime Networks, CBS Sports Network, and Smithsonian Networks, reported higher margins with OIBDA of $231 million on sales of $478 million. The segment contains businesses like fantasy sports which have good growth potential. Fantasy sports, especially the daily version, has attracted interest & investment from Comcast (CMCSA) and MGT Capital Investments (MGT). The outdoor advertising business has remained a drag on earnings in the last quarter. European and Asian outdoor businesses are expected to be sold within this year. For the American outdoor business, the company has already submitted a request to qualify the business as a real estate investment trust (“REIT”). It is planning to bring an IPO for selling minority ownership of the business. The expected growth is likely to help the stock continue its good performance over the next few quarters, provided the markets remain stable.
