How Will DirecTV (DTV) Stock Be Affected By This Upgrade?

NEW YORK (TheStreet) -- DirecTV (DTV) shares were upgraded to "buy" from "hold" with a $90 price target by analysts at Pivotal Research on Wednesday.

The upgraded outlook comes after last week's release of the company's second quarter financial results which saw the satellite television provider beat analysts top and bottom line guidance during the quarter.

DirecTV shares closed trading at $85.15 yesterday.

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Separately, TheStreet Ratings team rates DIRECTV as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DIRECTV (DTV) 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. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 34.74% and other important driving factors, this stock has surged by 35.98% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DTV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • DIRECTV has improved earnings per share by 34.7% 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, DIRECTV increased its bottom line by earning $5.19 versus $4.61 in the prior year. This year, the market expects an improvement in earnings ($5.91 versus $5.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 22.1% when compared to the same quarter one year prior, going from $660.00 million to $806.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.9%. Since the same quarter one year prior, revenues slightly increased by 5.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 48.46% is the gross profit margin for DIRECTV which we consider to be strong. Regardless of DTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.93% trails the industry average.
  • You can view the full analysis from the report here: DTV Ratings Report
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