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Brean Capital Sees TiVo On Verge Of Strong Value Creation

Dwight Einhorn

In a report published Thursday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $16.00 price target on TiVo (NASDAQ: TIVO).

In the report, Brean Capital noted, “We believe TiVo is on the verge of strong value creation. TiVo announced a distribution deal with Cogeco, a Canadian cable company with about 800,000 video subscribers. This is not the big one we have been waiting for, but it is a positive development. We believe that this will be the first of a spate of deals to be announced over the next six months.

"We expect TiVo to announce further deals with tier-2 U.S. cable companies where it is becoming the de facto standard for TV Everywhere (TVE), and we look for the announcement of a more comprehensive deal with a large European cable company, possibly before IBC (International Broadcast Conference) in September. Given the recent acceleration in deployments among TiVo's existing customer base, the likelihood of further distribution wins, and the ability to leverage TiVo's high fixed-cost, low variable-cost, business model, we reiterate our Buy rating and target price of $16 on shares of TIVO.”

TiVo closed on Wednesday at $12.77.

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