CBS Gains on UBS Rating

CBS shares are gaining today after UBS initiated coverage of the media company with a buy rating and $21 price target.
By Theresa McCabe ,

NEW YORK (

TheStreet

) --

CBS

(CBS) - Get Report

shares are gaining today after UBS initiated coverage of the media company with a buy rating and $21 price target.

Analyst John Janedis predicts that the company's diversified revenue stream and the recovering advertising market will drive CBS's earnings growth in upcoming quarters.

The improved advertising marketplace was reflected in the company's third-quarter report. CBS network advertising revenue increased 7% and its interactive display advertising revenue rose 17%. The company's television stations saw a 25% gain in advertising revenues while its radio stations saw a 9% increase.

Advertising accounts for about 66% of CBS's total revenue. In his Dec. 3 research note, Janedis said that as the market recovers, "CBS network ad growth is poised to outpace peers for the next several quarters, at a minimum."

>>CBS Earnings Up on Cost Cuts

UBS projects that the company will report earnings of $1.10 per share in 2010, and $1.46 in 2011. The firm anticipates that a significant share repurchase program will also help to drive earnings growth over the next several quarters.

CBS shares are up more than 1.2% today to around $17.50. The stock is up more than 23% over the past year.

-- Written by Theresa McCabe in Boston.

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