DirecTV: Citi Downgrades; Says Good News Already Priced In

DirecTV (DTV) shares are modestly lower this morning after Citigroup analyst Jason Bazinet cut his rating on the stock to Hold from Buy. He maintains a $38 price target on the shares.

The analyst notes that the satellite TV service operator trades at a premium to rival Dish Network (DISH), at 12.8x estimated 2010 unlevered free cash flow, versus 10.3x for DISH. He says three factors justify the premium–DTV is growing free cash flow, unlike DISH; it is buying back more shares; and it is seeing rapid growth in its Latin American business.

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