Morgan Stanley analyst Thomas Yeh has maintained their neutral stance on STRZ stock, giving a Hold rating on August 8.
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Thomas Yeh has given his Hold rating due to a combination of factors that influence Starz Entertainment Corp’s financial outlook. The company’s sub-scale position in the competitive streaming market limits its growth potential, which is a significant consideration in the rating. Additionally, Starz’s plans to reduce content expenditure, while aiming for modest average revenue per user growth, are expected to maintain stable EBITDA levels.
However, the high level of net debt, representing 75% of the current enterprise value, introduces a wide range of potential equity outcomes. The market’s perception of risks associated with sustaining current EBITDA levels is reflected in Starz’s trading below its legacy media peers. Furthermore, while there is potential for growth through a transition from linear bundles to a-la-carte streaming, the lack of intellectual property ownership poses a risk to the business model.
In another report released on August 8, J.P. Morgan also maintained a Hold rating on the stock with a $16.00 price target.
Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of STRZ in relation to earlier this year.