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NEW YORK — Shares of Central European Media Enterprises Ltd., which operates TV channels in Central and Eastern Europe, got a boost Monday after an analyst upgraded the stock and said the company's markets may have hit bottom sooner than expected.
The Bermuda-based broadcast network operator's advertising market and financial profile have improved, said Morgan Joseph analyst David Kestenbaum in a note to investors. He upgraded the company's shares to "Buy" from "Hold," with a target price of $25.
Last week, the company signed a deal to receive a $100 million investment and a TV channel from one of its shareholders, Ukrainian businessman Igor Kolomoisky, in exchange for a 49 percent stake in the company's Ukrainian operations. The deal is expected to close by the end of the third quarter. It follows a $241.5 million investment earlier this year by Time Warner Inc.
The two deals, Kestenbaum said, "significantly mitigate" financial risk for the company. Also, the addition of the TV channel, TET TV, will likely help the company "succeed in its multichannel and local content creation strategy," he added.
"We continue to believe CME is one of the best positioned media companies in the world with its dominant broadcasting franchise combined with its emerging Internet properties," Kestenbaum wrote.
Central European Media Enterprises was founded by cosmetics billionaire Ronald Lauder.
The company's shares rose $1.01, or 5.1 percent, to $20.83 in afternoon trading. In the past 52 weeks, the stock has traded between $4.67 and $90.23.
