Back to top

Analyst Blog

We reaffirm our long-term Neutral recommendation on Scripps Networks Interactive Inc. (SNI - Analyst Report).

The company continues to perform well primarily due to significant growth in advertising and affiliate-fee revenue at the company’s flagship Lifestyle Media businesses and higher segment profit. We believe both advertising revenue and affiliate fee revenue will remain healthy in the near future due to an improving U.S. economy.

Acquisition of a majority stake in the Travel Channel, re-branding of the FLN channel as Cooking Channel, and the divestment of the struggling Shopzilla networks will help the company to maintain its future growth. Scripps Networks now has three very powerful and completely distinct programming categories namely, home, food, and travel.

Scripps Networks is a pure-play lifestyle cable networks consisting of six channels. All these cable channels have loyal audiences, who also views Scripps Networks contents in several non-TV platforms. This helps the company to explore the non-TV verticals such as magazines (print media) and websites (Internet). Recently, the Board of Directors of Scripps Networks has authorized to increase quarterly dividend by a massive 33% from $0.075 per share to $0.10 per share. We believe the primary reason behind this decision is the company’sclear visibility of its future business potential.

However, deterioration in TV viewership rating in the last quarter is a major concern for Scripps Networks. Moreover, despite the increased advertising revenue of the company in the last quarter, it fell below the growth rate of Discovery Communications Inc. (DISCA - Analyst Report) and News Corp. (NWSA - Analyst Report). We believe the positive factors are already reflected in the current valuation leaving little room for above market gain.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%