On Jan 3, 2015, Zacks Investment Research upgraded Liberty Global plc (LBTYA), a leading cable multi-service operator in Europe, by a notch to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Ever since the company announced robust third-quarter 2014 earnings on Nov 6, shares have gained about 9% riding on positive estimate revisions. Liberty Global posted adjusted earnings of 20 cents per share, ahead of the Zacks Consensus Estimate of 14 cents.
Notably, the company's strength is evident in multiple areas, and we believe that its revenues will continue to benefit from its triple-play offering of video, broadband, and telephone, as it signs up more “bundled” customers in Europe and Latin America.
Also, upward estimate revisions reflect optimism regarding the stock’s prospects. The Zacks Consensus Estimate for 2014 moved north by 26.9% to a loss of 19 cents per share from a loss of 26 cents over the last 60 days. Similarly, for 2015, the estimates moved up by 118.5% to 59 cents for the same time period. On a year-over-year basis, earnings are expected to surge about 403.6% in 2015.
Going forward, we believe that the long-term business fundamentals of the company are very intriguing, primarily owing to strong demand for its digital cable-TV services, the acquisition of TV content producer All3Media, faster broadband and triple-play bundled offerings, strong cash flow and the growing popularity of Horizon TV services.
Other Stocks to Consider
Black Diamond, Inc. (BDE), Pool Corp. (POOL) and Polaris Industries Inc. (PII) are some of the better-ranked stocks worth considering in this sector over the near term. While Black Diamond and Pool sport a Zacks Rank #1, Polaris Industries carries a Zacks Rank #2 (Buy).
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