The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

Trefis

) --

CBS

(CBS) - Get CBS Corporation Class B Report

recently released first-quarter earnings. Based on continued improvement in the ad market and better profit margins, we have upgraded our stock price estimate to $27.49.

Below, we look more specifically at positive developments in the CBS syndication business. CBS competes with companies like

Disney

(DIS) - Get Walt Disney Company Report

,

News Corp.

(NWS) - Get News Corporation Class B Report

,

Time Warner

(TWX)

and

Viacom

TheStreet Recommends

(VIA) - Get Viacom Inc. Class A Report

.

We estimate that CBS's TV licensing and home entertainment business constitutes about 14% of the company's stock value.

Licensing revenues are generated from syndication of shows produced or acquired by CBS Television Studios, CBS Studios International and CBS Television Distribution -- these include hit shows like CSI, for example.

Syndication allows successful series to run on multiple channels after their initial run. International broadcasters, television stations and cable networks are major buyers of shows produced for licensing and syndication. The price paid for such shows is governed by their popularity among viewers, making viewer reception of paramount importance.

During its recent earnings announcement, CBS management mentioned that it recently sold the

Hawaii Five-O

TV series to TNT. CBS thinks that this show will grab about $5 million per episode from domestic and international syndication agreements.

In addition to the above, the company's deal with

Netflix

(NFLX) - Get Netflix, Inc. (NFLX) Report

is expected to earn incremental licensing revenues. More importantly, the deal is not going to hamper its other syndication revenues since the programming that Netflix is getting access to is already sold to other networks or channels for syndication.

This is just the beginning, but similar opportunities going forward could spur new growth to licensing revenues and drive upside to CBS stock value. One could tie CBS's confidence in Netflix to the shifting attitude of the media industry in general, which is beginning to see Netflix as a partner rather than a disruptor of business.

Our price estimate for CBS stock stands at $27.49, in line with market price.

See our

complete analysis for CBS' stock here.

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