Banc of America Securities analyst Micheal Savner upgraded Playboy Enterprises shares from a neutral to a buy, citing upcoming cost cuts.
In his report issued Thursday, Savner said the company is scheduled to announce cost-cutting measures aimed at discretionary marketing and content procurement. He hailed the company’s new video-on-demand service with Comcast and also cited its plans with the Palms Casino in Las Vegas which would help boost similar deals in the works elsewhere.
But Savner cautioned that "there are few incremental data points and the traditional media environment remains weak."
Playboy shares were up 20 cents this morning to $9.20, with a 52-week high of $15.88, reached on Nov. 11, and a 52-week low of $8.90, reached Wednesday.
The company, which is rebounding from years of continuing losses, is still struggling with its publishing and domestic television business. Analysts say viewers are moving away from linear networks and toward video on demand where the company is still attempting to develop a strong presence. It’s also getting squeezed by Direct TV which is giving it less channel space.
Playboy operates its flagship Playboy Magazine as part of its publishing unit and also operates entertainment and licensing divisions.
