Zacks Investment Research downgraded shares of Shaw Communications Inc. (SJR) from OUTPERFORM to NEUTRAL on February 08, 2013, with a target price of $25.00.
We downgrade our recommendation to Neutral on Shaw Communications solely based on its current valuation, which soared nearly 29.5% in the last year. The stock is currently trading at the high-end of its 52-week price range. We believe, at present, Shaw Communications is fairly valued at this high-level of valuation. Meanwhile, the company's first quarter of fiscal 2013 financial results topped the Zacks Consensus Estimates. The company continues to improve EBITDA margin and free cash flow due to the discontinuation of promotional activities. The loss of basic video and DTH subscribers were more than offset by huge gain of high-speed Internet and telephony subscribers. Management reaffirms its previous strong guidance for fiscal 2013. Further, the company recently hiked its dividend rate. Shaw Communications has launched – "Shaw Go" – an innovative TV Everywhere service, which is available only on iPad 2 and iPhone 5.
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