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Still Neutral on Shaw Communications

Zacks Equity Research

On May 3, we reiterate our Neutral recommendation on Shaw Communications Inc. (SJR), as the company’s top and bottom line surpassed the Zacks Consensus Estimate in the recently concluded quarter.

Why Kept Neutral?

Shaw Communications continues to consolidate its position across Canada by gradually expanding its Wi-Fi network and deploying high-speed DOCSIS 3.0 network in several western Canadian markets. Moreover, the launch of “Shaw Go” -- an innovative TV Everywhere service coupled with rate hikes will trigger the top-line growth in the forthcoming quarters.

Furthermore, the acquisition of Canwest Global Communications Corp. (“Canwest”) which includes GlobalTV network will not only help Shaw Communications to position itself as one of the leading entertainment and communications companies in the Canadian broadcasting industry but at the same time will also allow it to diversify its operations, thereby creating better growth prospects for the company.

However, the continuous loss of cable TV subscribers coupled with intense competition from TelusCorp.’s popular Optik TV will continue to act as headwinds for Shaw Communications, going forward.

Currently, Shaw Communications has a Zacks Rank #3 (Hold).

Other Stocks Outlook in Related Industries

Other companies belonging to the same media sector are CBS Corporation (CBS), Time Warner Inc. (TWX) and Rogers Communications Inc.  (RCI). While both CBS Corporation and Time Warner Inc. have beaten the Zacks Consensus Estimate, Rogers Communications missed the Zacks Consensus Estimate.

CBS Corporation has a Zacks Rank #2 (Buy) while both Time Warner Inc. and Rogers Communications have a Zacks Rank #3 (Hold).

Read the Full Research Report on SJR

Read the Full Research Report on TWX

Read the Full Research Report on CBS

Read the Full Research Report on RCI

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