Couple of comments on Getty Images (NYSE:GYI) following results:
- Piper Jaffray is upping their tgt to $50 from $45 after Getty reported a better-than-expected Q4 performance with improved growth in single image Royalty Free volumes as well as strength in Editorial, Film, and Micropayment. The one area for concern in the quarter is Rights Managed imagery (40% of revs), which increased just 1% y/y and the firm believes continues to be impacted by a softening offline ad environment. While they are incrementally more positive given the stabilization in RF, Q4 growth remained modest at 6.5% y/y (currency neutral) and GYI maintained its guidance for mid-single digit revenue growth in 2007. Also, while there could be some benefit from new initiatives in 2007, they would like to see signs of traction against these initiatives before getting more constructive. As such, the firm is maintaining Market Perform rating.
- JP Morgan notes that given the low expectations going into the quarter, they expect the shares to rally, continuing yesterday's rise following the news of Blum Capital's 5% stake. Firm maintains Neutral with a positive bias given GYI's undemanding valuation.
- Deutsche Bank thinks the stock at $46 (after hours trading) the stock could give up some of its gains, from profit taking. The stock already moved up 5% yesterday, thanks to the Blum investment, which drove speculation of a large corporate transaction and/or management shake up. They view the Blum investment as a positive building a base of long-term shareholders. Having said that, there are a few potential catalytic events to look out for, such as a potential settlement with convertible holders, positive Corbis update (mid Feb) and Jupitermedia earnings. In addition, there could be potential accretive transactions such as acquisitions and significant stock repurchases in the coming quarters. As the firm has said in the past, they think the company is underleveraged (less than 1x net debt/EBITDA) and could take on additional debt in the coming quarters. Near term, the company still needs to deal with the potential convertible default and the stock option overhang.
Maintains Hold and ups tgt to $45 from $43.
Notablecalls: I suspect the stock will have trouble hanging on to the $46.50 level it reached in after hrs. It needs a tier-1 upgrade to stay there and it looks like there won't be one.
- Piper Jaffray is upping their tgt to $50 from $45 after Getty reported a better-than-expected Q4 performance with improved growth in single image Royalty Free volumes as well as strength in Editorial, Film, and Micropayment. The one area for concern in the quarter is Rights Managed imagery (40% of revs), which increased just 1% y/y and the firm believes continues to be impacted by a softening offline ad environment. While they are incrementally more positive given the stabilization in RF, Q4 growth remained modest at 6.5% y/y (currency neutral) and GYI maintained its guidance for mid-single digit revenue growth in 2007. Also, while there could be some benefit from new initiatives in 2007, they would like to see signs of traction against these initiatives before getting more constructive. As such, the firm is maintaining Market Perform rating.
- JP Morgan notes that given the low expectations going into the quarter, they expect the shares to rally, continuing yesterday's rise following the news of Blum Capital's 5% stake. Firm maintains Neutral with a positive bias given GYI's undemanding valuation.
- Deutsche Bank thinks the stock at $46 (after hours trading) the stock could give up some of its gains, from profit taking. The stock already moved up 5% yesterday, thanks to the Blum investment, which drove speculation of a large corporate transaction and/or management shake up. They view the Blum investment as a positive building a base of long-term shareholders. Having said that, there are a few potential catalytic events to look out for, such as a potential settlement with convertible holders, positive Corbis update (mid Feb) and Jupitermedia earnings. In addition, there could be potential accretive transactions such as acquisitions and significant stock repurchases in the coming quarters. As the firm has said in the past, they think the company is underleveraged (less than 1x net debt/EBITDA) and could take on additional debt in the coming quarters. Near term, the company still needs to deal with the potential convertible default and the stock option overhang.
Maintains Hold and ups tgt to $45 from $43.
Notablecalls: I suspect the stock will have trouble hanging on to the $46.50 level it reached in after hrs. It needs a tier-1 upgrade to stay there and it looks like there won't be one.
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