NEW YORK (TheStreet) -- Shares of digital entertainment technology company Rovi (ROVI) are higher in pre-market trading after analysts at Brean Capital defended the stock this morning, stating that the bear case against it is being overstated.
WHAT'S NEW: Brean Capital believes the bear case for Rovi is being overstated and reiterates a Buy rating on the stock in a research note titled "To Catch a Falling Knife." Brean analysts Todd Mitchell and Giancarlo Chaux admit that Rovi is "poorly positioned" in its intellectual property claims against Netflix (NFLX - Get Report). The analysts, however, think Rovi will be able to renew its licensing deals with large U.S. service providers in 2016 regardless of the outcome of the Netflix case. They also do not think a loss in the case is inevitable. Mitchell and Chaux keep a Buy rating on Rovi with a $31 price target.
WHAT'S NOTABLE: In a note to investors on May 26, JPMorgan analysts said they viewed Charter's (CHTR - Get Report) acquisition of Time Warner Cable (TWC) as a "de facto renewal" for Rovi, noting that the company's extension with Charter included provisions for future M&A. They added that they expect the main driver of Rovi shares to be the impending Netflix ruling, rather than the outcome of its remaining contract renewals with DirecTV (DTV - Get Report), Comcast (CMCSA - Get Report) and DISH (DISH - Get Report). JPMorgan kept a Neutral rating on Rovi at that time.
PRICE ACTION: In early pre-market trading, Rovi shares rose about 1.5% to $15.79.