JPMorgan calls CBS a 2017 top pick on streaming service growth

Les Moonves, president and chief executive officer of CBS
Adam Jeffery | CNBC

Alexia Quadrani of JPMorgan reiterated an overweight rating on CBS, calling the stock a top pick for 2017 due to the potential for superior earnings growth compared with the rest of the media industry.

"CBS is on pace to grow underlying network advertising in 2016 at mid single digits, has achieved over 1 million subs at CBS All-Access and Showtime OTT (over-the-top), is generating record political dollars at its TV stations even while other broadcasters miss targets, and continues to drive higher retrans/reverse comp revenue (yesterday management broached the idea of 'perhaps surpassing' the $2.5b target in 2020)," Quadrani wrote in a research note Wednesday.

Based on analysis by JPMorgan, CBS possesses one of the "strongest EPS growth rates" in the media space, while additional visibility on earnings in the past quarters shows the potential for continued expansion.