UPDATE: Morgan Stanley Reiterates On Grupo Televisa SAB Following Weak 3Q14 Advertising

In a report published Monday, Morgan Stanley analyst Michel Morin reiterated an Overweight rating on Grupo Televisa SAB (NYSE: TV), but lowered the price target from $42.00 to $38.00.

In the report, Morgan Stanley noted, “Televisa reported much weaker than expected Advertising revenue growth of -6% vs our projection of +7% y/y. As a result, we cut our 4Q14 to -3% from +5%,and we cut our 2015 (and beyond) Advertising revenue projections by 4%. However, this is more than offset by (1) higher projections in other segments and (2) by the inclusion of recently-acquired Cablecom in our projections. As such, we raise 2015e EBITDA by 3% and 2016 by 1%. Below the EBITDA line, we remove the impact of Iusacell on Affiliate net income, such that we raise our 2015e EPADR by 1% and cut 2016 by 7%. The more significant 9.5% cut to our PT reflects the mix shift to Cable from Content, with the latter commanding a higher multiple in our sum-of-the-parts valuation.”

Grupo Televisa SAB closed on Friday at $32.84.