CBS Still King as Amazon Battles Netflix

BOSTON (TheStreet Ratings) -- CBS (CBS) is scheduled to report quarterly earnings after the market close today, and analysts expect that the media company should thrive due to growing demand for its massive library of content.

Analysts are expecting CBS to report second-quarter earnings of $0.46 a share, compared with $0.22 in the year-earlier quarter. Revenue is estimated to increase to $3.6 billion from $3.3 billion, according to a poll of analysts by Thomson Reuters. The company should continue to benefit from a surge in demand for library content as new online providers (such as Amazon (AMZN)) attempt to compete with Netflix (NFLX).

The following is taken from a first-quarter report published by TheStreet Ratings, an independent-research unit of TheStreet that uses a quantitative model to evaluate stocks.

CBS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CBS increased its bottom line by earning $1.05 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.05).

We rate CBS a buy. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Our model has a price target of $36 on shares of CBS, offering the potential for 32% upside from current levels.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Powered by its strong earnings growth and other important driving factors, this stock has surged by over 86% in the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level now somewhat expensive compared to the rest of the industry. The other strengths this company shows, however, justify the higher price levels.

>>For upcoming earnings and estimates, see our Earnings Calendar.

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