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We reiterate our Neutral recommendation on Liberty Media Corp. . The company’s first-quarter 2011 financial results fell below the Zacks Consensus Estimates. However, the company’s most prestigious division QVC continues to perform well. QVC shopping network has transformed itself as a powerful global brand, which will help it to grow its revenue in double digits in the near future.

QVC division of Liberty Media has become the undispted market leader in the $8 billion TV home-shopping business. At present QVC commands an estimated 69% market share, far ahead of its nearest rivals such as HSN Inc. (HSNI - Free Report) and ValueVision Media Inc. Furthermore, Liberty Miedia also owns 32% stake of HSN Inc. TV home-shopping business is characterized as one with very stable customer base, who are mostly women.

In a major strategic decision, last month, Liberty Media has decided to acquire 70% stake of Barnes & Noble Inc. (BKS - Free Report) for approximately $1.02 billion. Barnes & Noble is the largest bookseller of the world. The company currently operates 705 general bookstores and 636 college bookstores throughout the U.S. We believe Barnes & Noble will be a very good fit in Liberty Media’s hetrogeneous business structure. The company owns or has major stake in several e-commerce sites. The physical locations of Barnes & Noble stores may be utilized as one-stop-selling point offering books, gym equipments, gift items, chat with travel agent, mortgage rate information to name a few.

The stock price of Liberty Media has moved up by more than 67% last year. The stock is currently trading at its 52-week high price range. Liberty Media is also trading at higher multiples compared with the S&P 500 average with respect to several valuation metrics. We believe Liberty Media is currently fairly valued and does not provide any above market potential.

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