巴克莱-美股-电信服务业-美国卫星、媒体与电信业2018年Q4盈利预览-2019.1.18-36页.pdf

Equity Research 18 January 2019 CORE Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 31.U.S.Cable,Media&Telecom Q4 Earnings Preview Cable:This will be the first quarter post Sky approval for Comcast which could result in consolidated numbers being a bit messy due to purchase price accounting adjustments and variance in Sky estimates.Also,we believe there is upside to Sky synergies although it is not clear if Comcast will be ready to talk about this.Focus is also likely to be on the scale of Comcasts ambitions in OTT due to the recent announcement of a new OTT service as well as AT&Ts stated intent to sell its 10%stake in Hulu in which Comcast owns 30%.Video net adds have a bit of a tough comp due to the launch of Stream in 4Q17.Comcast also implemented a price hike in 4Q18.In the case of Charter,with billing system issues now behind it and the company claiming it is now in steady state post all its deals,it will need to come up with a clean beat with no caveats.Also,commentary on 2019 capital intensity and future M&A is likely to be important.ATUS will continue to see benefits from its midyear price increase,which should result in overall revenue growth consistent with other cable companies despite lack of unit growth.The cadence of price increase in 2019 is likely to be more frontend loaded vs.last year which should help revenue growth remain stable until at least 2Q19.Telecom:Verizon and T-Mobiles positive pre-announcements ahead of the quarter were incrementally positive for wireless sentiment as both demonstrated continued momentum on both ends of the subscriber funnel,outpacing expectations in terms of both net adds and churn.Combined with ARPU trends largely signaled by both throughout the last several months(VZ modestly positive,TMUS flat to slightly negative),expectations should largely be set for VZ and TMUS for the quarter.The large question that will be in focus is whether these strong results are due to positive,and largely unanticipated,runway in smartphone penetration or due to share gains from T/S.We believe that T will face a tough comp in sub metrics compared to 4Q17(+295k postpaid phone net adds)especially when considering VZ/TMUS strength and a full quarter of both CMCSA/CHTR pressure.In addition,following emphasis of its 2019 ambitions(2.5x leverage,$26bn FCF,$14bn dividend),investors will look to whether Ts Q4 demonstrates the execution quality needed for the company to ultimately meet its dividend and sustain cash generation levels absent one-time events.For S,the company indicated weaknesses in prepaid especially as competitive offers(VZ/TMUS/T)were focused on the lower end segment in Q4.While we believe the pre-announcements largely cap upside surprises,T and S moves are likely to be volatile and dependent on perceived share movements and execution quality.Media:Q4 ratings were down 15%at VIAB,11%at DISCA,12%at CMCSA and 22%at Turner.This could create some downside risk relative to our expectations at cable network groups although broadcast will benefit from strong political advertising revenues and sports viewership stability.Cable affiliate revenues across our coverage are expected to be up 5.5%in the quarter.Disney is likely to benefit from renegotiation of the VZ deal,which includes ACC Network.Disney will see further tailwind from this source in 2019.Industry box office was up 2%in CYQ4 despite tough comps at Disney reflecting positive gains for the rest of the studios,especially Universal and Warner.Model Updates:We are updating our models ahead of CY4Q18 for CMCSA,CHTR,ATUS,T,VZ,TMUS,S,FOXA,DIS and NYT.INDUSTRY UPDATE U.S.Cable,Satellite&Telecom Services NEUTRAL Unchanged U.S.Media NEUTRAL Unchanged For a full list of our ratings,price target and earnings changes in this report,please see table on page 2.U.S.Cable,Satellite&Telecom Services U.S.Media Kannan Venkateshwar+1 212 528 7054 BCI,US Divyaunsh Divatia+1 212 526 9947 BCI,US Calvin Hou+1 212 526-8284 BCI,US Shelley Yang+1 212 526 0416 BCI,US Barclays|U.S.Cable,Media&Telecom 18 January 2019 2 Summary of our Ratings,Price Targets and Earnings Changes in this Report(all changes are shown in bold)Company Rating Price Price Target EPS FY1(E)EPS FY2(E)Old New 17-Jan-19 Old New%Chg Old New%Chg Old New%Chg U.S.Cable,Satellite&Telecom Services Neu Neu Altice USA(ATUS)OW OW 18.55 25.00 25.00-0.14-0.16-14 0.59 0.58-2 AT&T(T)EW EW 30.64 33.00 32.00-3 3.53 3.50-1 3.60 3.57-1 Charter Communications,Inc.(CHTR)UW UW 294.41 259.00 259.00-5.51 5.51-7.11 6.99-2 Comcast Corp.(CMCSA)OW OW 35.91 44.00 44.00-2.53 2.53-2.82 2.76-2 Sprint Corp.(S)EW EW 6.01 6.00 6.00-0.07 0.07-0.07 0.06-14 T-Mobile US Inc.(TMUS)OW OW 66.25 74.00 74.00-3.29 3.32 1 4.05 4.04 0 Verizon Communications Inc.(VZ)EW EW 56.83 53.00 53.00-4.66 4.66-4.82 4.83 0 U.S.Media Neu Neu The New York Times(NYT)UW UW 25.50 18.00 18.00-0.76 0.75-1 0.85 0.85-Twenty-First Century Fox(FOXA)OW OW 48.39 50.00 50.00-1.92 1.94 1 2.20 2.28 4 Walt Disney Co.(DIS)OW OW 111.01 130.00 130.00-6.98 7.07 1 6.96 7.01 1 Source:Barclays Research.Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in the reporting currency.FY1(E):Current fiscal year estimates by Barclays Research.FY2(E):Next fiscal year estimates by Barclays Research.Stock Rating:OW:Overweight;EW:Equal Weight;UW:Underweight;RS:Rating Suspended Industry View:Pos:Positive;Neu:Neutral;Neg:Negative Barclays|U.S.Cable,Media&Telecom 18 January 2019 3 MODEL UPDATES Comcast Price target retained at$44 Value Cable business at 7.8x 2019 EBITDA of$23.2Bn,NBCU at 10 x 2019 EBITDA of$9.1Bn and Sky at 8.5x 2019 EBITDA of$3.1Bn Comcast Corp.(CMCSA):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.53A 0.66A 0.66A 0.62A 0.68E 0.67E 0.65E 25%2%Q2 0.52A 0.64A 0.64A 0.65A 0.75E 0.73E 0.72E 23%14%Q3 0.55A 0.62A 0.62A 0.65A 0.69E 0.67E 0.71E 13%8%Q4 3.17A 0.61E 0.60E 0.62E 0.70E 0.68E 0.71E-81%13%Year 4.78A 2.53E 2.53E 2.55E 2.82E 2.76E 2.79E-47%9%P/E 7.5 14.2 13.0 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT Charter Price target retained at$259 Valued at 7.6x 2019 Cable EBITDA of$17.1Bn Charter Communications,Inc.(CHTR):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.58A 0.71A 0.71A 0.70A 1.14E 1.16E 1.40E 22%63%Q2 0.52A 1.17A 1.17A 1.15A 1.70E 1.69E 1.90E 125%44%Q3 0.19A 2.14A 2.14A 2.11A 1.38E 1.35E 1.86E 1026%-37%Q4 34.56A 1.21E 1.21E 1.45E 2.14E 2.04E 2.32E-96%69%Year 34.09A 5.51E 5.51E 5.51E 7.11E 6.99E 7.70E-84%27%P/E 8.6 53.4 42.1 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT CMCSA Stock Rating OVERWEIGHT Industry View NEUTRAL Price Target USD 44.00 Price(17-Jan-2019)USD 35.91 Potential Upside/Downside+22.5%CHTR Stock Rating UNDERWEIGHT Industry View NEUTRAL Price Target USD 259.00 Price(17-Jan-2019)USD 294.41 Potential Upside/Downside-12.0%Barclays|U.S.Cable,Media&Telecom 18 January 2019 4 Altice US Price target retained at$25 Valued at 9x 2019 EBITDA of$4.4Bn Altice USA(ATUS):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1-0.10A-0.17A-0.18A-0.17A 0.06E 0.04E 0.07E-80%122%Q2-0.64A-0.13A-0.14A-0.13A 0.11E 0.12E 0.09E 78%186%Q3-0.27A 0.04A 0.04A 0.04A 0.18E 0.18E 0.14E 115%350%Q4 3.06A 0.13E 0.12E 0.11E 0.24E 0.23E 0.17E-96%92%Year 2.05A-0.14E-0.16E-0.14E 0.59E 0.58E 0.47E N/A 463%P/E 9.1 N/A 31.8 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT Fox Price target retained at$50 FOXA valued at$50 per share based on$37 deal value for FOXA assets being sold to Disney,and$13 for New FOXA based on 7.8x CY2019/20 TV EBITDA,9.5x CY2019 Cable Nets EBITDA,and 2.5x Other Multiple(we brought down the multiple because corporate expenses are expected to be higher only temporarily).Twenty-First Century Fox(FOXA):Quarterly and Annual EPS(USD)2018 2019 2020 Change y/y FY Jun Actual Old New Cons Old New Cons 2019 2020 Q1 0.46A 0.52A 0.52A 0.52A 0.57E 0.59E 0.55E 13%13%Q2 0.99A 0.32E 0.31E 0.33E 0.42E 0.43E 0.44E-69%39%Q3 0.46A 0.55E 0.57E 0.55E 0.58E 0.60E 0.62E 24%5%Q4 0.49A 0.52E 0.54E 0.54E 0.64E 0.66E 0.66E 10%22%Year 2.41A 1.92E 1.94E 2.00E 2.20E 2.28E 2.25E-20%18%P/E 20.1 24.9 21.2 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT ATUS Stock Rating OVERWEIGHT Industry View NEUTRAL Price Target USD 25.00 Price(17-Jan-2019)USD 18.55 Potential Upside/Downside+34.8%FOXA Stock Rating OVERWEIGHT Industry View NEUTRAL Price Target USD 50.00 Price(17-Jan-2019)USD 48.39 Potential Upside/Downside+3.3%Barclays|U.S.Cable,Media&Telecom 18 January 2019 5 Disney Price target retained at$130 Valued on FY2021 Pro Forma EBITDA multiples(8x Avg 2020-21 Broadcasting,9x ESPN,8x Other Cable Networks,12x Parks and Resorts,11x Studio Entertainment,11.5x Consumer Products&Interactive),and 5x Corporate.Walt Disney Co.(DIS):Quarterly and Annual EPS(USD)2018 2019 2020 Change y/y FY Sep Actual Old New Cons Old New Cons 2019 2020 Q1 1.89A 1.51E 1.56E 1.56E 1.82E 1.84E 1.60E-17%18%Q2 1.84A 2.00E 1.95E 1.90E 1.95E 1.96E 2.04E 6%0.51%Q3 1.87A 2.04E 2.08E 2.04E 1.90E 1.86E 2.04E 11%-11%Q4 1.48A 1.42E 1.48E 1.58E 1.29E 1.35E 1.57E 0%-9%Year 7.08A 6.98E 7.07E 7.10E 6.96E 7.01E 7.38E-0.14%-0.85%P/E 15.7 15.7 15.8 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT New York Times Price target retained at$18 Valued at 8x 2019 EBITDA of$275Mn.The New York Times(NYT):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.10A 0.17A 0.17A 0.17A 0.16E 0.16E 0.17E 70%-6%Q2 0.17A 0.17A 0.17A 0.17A 0.15E 0.15E 0.18E 0%-12%Q3 0.12A 0.15E 0.15A 0.15A 0.19E 0.19E 0.19E 25%27%Q4 0.39A 0.27E 0.27E 0.28E 0.35E 0.35E 0.36E-31%30%Year 0.78A 0.76E 0.75E 0.79E 0.85E 0.85E 0.94E-4%13%P/E 32.7 33.8 30.0 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT DIS Stock Rating OVERWEIGHT Industry View NEUTRAL Price Target USD 130.00 Price(17-Jan-2019)USD 111.01 Potential Upside/Downside+17.1%NYT Stock Rating UNDERWEIGHT Industry View NEUTRAL Price Target USD 18.00 Price(17-Jan-2019)USD 25.50 Potential Upside/Downside-29.4%Barclays|U.S.Cable,Media&Telecom 18 January 2019 6 AT&T Price target lowered from$33 to$32 Valued at 6.7x(unchanged)2019 EBITDA of$61Bn(previously$62Bn).AT&T(T):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.74A 0.85A 0.85A 0.85A 0.93E 0.88E 0.88E 15%4%Q2 0.79A 0.91A 0.91A 0.91A 0.87E 0.89E 0.91E 15%-2%Q3 0.74A 0.90A 0.90A 0.90A 0.94E 0.96E 0.95E 22%7%Q4 0.78A 0.87E 0.84E 0.86E 0.85E 0.85E 0.84E 8%1%Year 3.05A 3.53E 3.50E 3.52E 3.60E 3.57E 3.58E 15%2%P/E 10.0 8.7 8.6 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT Verizon Price target retained at$53 Valued at 6.7x 2019 EBITDA of$49Bn.Verizon Communications Inc.(VZ):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.90A 1.17A 1.17A 1.17A 1.18E 1.22E 1.18E 30%4%Q2 0.90A 1.20A 1.20A 1.20A 1.24E 1.24E 1.19E 33%3%Q3 0.92A 1.22A 1.22A 1.22A 1.28E 1.26E 1.23E 33%3%Q4 1.02A 1.08E 1.08E 1.09E 1.13E 1.11E 1.15E 6%3%Year 3.75A 4.66E 4.66E 4.66E 4.82E 4.83E 4.72E 24%4%P/E 15.2 12.2 11.8 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT T Stock Rating EQUAL WEIGHT Industry View NEUTRAL Price Target USD 32.00 Price(17-Jan-2019)USD 30.64 Potential Upside/Downside+4.4%VZ Stock Rating EQUAL WEIGHT Industry View NEUTRAL Price Target USD 53.00 Price(17-Jan-2019)USD 56.83 Potential Upside/Downside-6.7%Barclays|U.S.Cable,Media&Telecom 18 January 2019 7 T-Mobile Price target retained at$74 Valued at 7.2x 2019 Core EBITDA of$12.5Bn T-Mobile US Inc.(TMUS):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Dec Actual Old New Cons Old New Cons 2018 2019 Q1 0.80A 0.78A 0.78A 0.78A 1.13E 1.12E 0.98E-3%44%Q2 0.67A 0.92A 0.92A 0.92A 1.09E 1.07E 1.12E 37%16%Q3 0.63A 0.93A 0.93A 0.93A 1.04E 1.02E 1.08E 48%10%Q4 3.11A 0.66E 0.69E 0.70E 0.80E 0.82E 0.84E-78%19%Year 5.21A 3.29E 3.32E 3.31E 4.05E 4.04E 4.03E-36%22%P/E 12.7 20.0 16.4 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT Sprint Price target retained at$6 Valued based on 50%TMUS deal probability post-merger value and 50%on standalone value based on 6x 2019E Core EBITDA of$8.3Bn Sprint Corp.(S):Quarterly and Annual EPS(USD)2017 2018 2019 Change y/y FY Mar Actual Old New Cons Old New Cons 2018 2019 Q1 0.05A 0.04A 0.04A 0.05A 0.06E 0.06E 0.04A-20%50%Q2-0.01A 0.05A 0.05A-0.01A 0.06E 0.05E 0.05A 600%0%Q3 1.76A-0.04E-0.04E 1.76A-0.05E-0.06E-0.02E N/A-50%Q4 0.02A 0.02E 0.02E 0.02A 0.00E 0.00E-0.02E 0%-100%Year 1.82A 0.07E 0.07E 1.81A 0.07E 0.06E 0.06E-96%-14%P/E 3.3 84.6 92.5 Source:Barclays Research.Consensus numbers are from Thomson Reuters received on 17-Jan-2019;14:35 GMT TMUS Stock Rating OVERWEIGHT Industry View NEUTRAL Price Target USD 74.00 Price(17-Jan-2019)USD 66.25 Potential Upside/Downside+11.7%S Stock Rating EQUAL WEIGHT Industry View NEUTRAL Price Target USD 6.00 Price(17-Jan-2019)USD 6.01 Potential Upside/Downside-0.2%Barclays|U.S.Cable,Media&Telecom 18 January 2019 8 MODEL UPDATES CMCSA FIGURE 1 Model Updates:Cable Segment Source:Company Reports,Barclays Research NewOldNewOldNewOldNewOldNew vs Old Estimates(Mn)Q4 18EQ4 18ENew vs Old2018E2018ENew vs Old2019E2019ENew vs Old2020E2020ENew vs OldCable Communications RevenueVideo5,554 5,554 0.0%22,432 22,432 0.0%22,196 22,232(0.2%)21,753 21,826(0.3%)HSD4,393 4,391 0.0%17,133 17,131 0.0%18,655 18,652 0.0%20,176 20,171 0.0%Voice977 973 0.4%3,959 3,955 0.1%3,756 3,753 0.1%3,563 3,560 0.1%Business Services1,858 1,858 0.0%7,148 7,148 0.0%7,920 7,920 0.0%8,756 8,756 0.0%Advertising801 811(1.2%)2,733 2,743(0.4%)2,475 2,478(0.1%)2,840 2,849(0.3%)Other412 412 0.0%1,605 1,605 0.0%1,661 1,661 0.0%1,719 1,719 0.0%Total Cable Revenue13,994 13,998(0.0%)55,009 55,013(0.0%)56,664 56,697(0.1%)58,806 58,881(0.1%)Cable OpexProgramming Costs3,314 3,314 0.0%13,261 13,261 0.0%13,689 13,711(0.2%)14,296 14,344(0.3%)Non Programming opex4,926 4,927(0.0%)19,326 19,327(0.0%)19,739 19,750(0.1%)19,957 19,981(0.1%)Cable Operating Cash Flow5,755 5,758(0.1%)22,423 22,426(0.0%)23,236 23,235 0.0%24,553 24,556(0.0%)OCF Margin41.1%41.1%-1bps40.8%40.8%0bps41.0%41.0%