NEW YORK (TheStreet) -- ValueVision Media (VVTV) shares are climbing more than 11% today after analyst Neely Tamminga of Piper Jaffray initiated coverage on the interactive media and home shopping company with a buy rating and an $8 price target.
Tamminga believes ShopNBC will return to positive earnings before interest, taxes, depreciation, and amortization in 2012 and will achieve net income in 2013.
The home shopping network has been gaining since November when it announced it was extending its license agreement with General Electric's (GE) NBC Universal for use of the ShopNBC brand to May 2012. ValueVision's 24-hour ShopNBC television network is broadcast to 77 million homes in the nation.
NBC currently owns more than 6 million shares of the company and GE is a large preferred stock holder.The network is the third-largest TV shopping unit behind Liberty Media Interactive's (LINTA) QVC and Home Shopping Network. Tamminga believes that growth in transactions at the company will result in more than a 15% gain in revenue over the next three years. She said ValueVision's key margin driver will be its ability to leverage fees paid to cable and satellite operators. "Leverage of cable and satellite distribution fees should drive EBITDA margins above 10% by 2015," Tamminga said in a Dec. 28 research note. She predicts that ValueVision will double its sales in the next five years, and that while the company will see a loss of 8 cents per share in the fiscal year of 2012, investors can expect positive earnings of 17 cents a share in 2013. She forecasts earnings of 95 cents per share in 2016 and said earnings could eventually exceed $1 per share "if cable and satellite fees can be lowered." Today shares spiked more than 11% and reached a 52-week high of $5.42 in mid-day trading. --Written by Theresa McCabe in Boston.
>To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV