RBC Capital analyst Alan Robinson this morning cut his rating on Coinstar (CSTR) to Sector Perform from Outperform, following a recent run-up in the stock.
He actually lifted his price target on the parent of the Redbox video kiosk rental chain to $54, from $36. And he raised his EPS estimates: for 2010, Robinson goes to $1.93, from $1.61, while for 2011, he goes to $2.87, from $2.29.
“With new DVD sourcing deals finally inked with Warner in February and Universal and Fox in April,” he writes, “management were able to open up on the recent call to the power of volume on the earnings model. Increased guidance has pushed EPS estimates to more reasonable levels, and improved visibility has given a boost to valuation multiples.” But he adds that the higher outlook is already reflected in the stock.
CSTR is up 37 cents, or 0.7%, to $56.03.
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