DG Fast Channel initiated to "buy" by Morgan Joseph
Shares of DG Fast Channel, Inc. (Nasdaq: DGIT) are treading in the green today after Morgan Joseph initiated coverage on the digital media delivery service provider with a “buy” rating and a target price of $30 per share.
Morgan Joseph analyst James Leahy says the advent of HDTV will drive digital advertising distribution, which should buoy DG Fast Channel’s long-term prospects, as the company is a leader in distribution of digital media to advertising and broadcast industries.
The analyst said he believes that as HDTV has finally gone mainstream with growth in television set purchases, available HD content and available HD channels on pay television platforms, he thinks that the trend toward more prevalent adoption of HD will push advertisers to produce high-definition advertisements requiring digital delivery to broadcast outlets.
The company’s core business should remain the major focus going forward; however, Leahy says the company has an eye out to penetrate Internet-based advertising by capitalizing on the growth potential in online video and online video-based advertising. Leahy says DG Fast Channel would most likely execute on such a strategy through its partnership with Viewpoint, an Internet marketing technology company.
Furthermore, the presidential election and coverage of the Olympics should create a “solid” 2008 for the company, according to Leahy. The presidential election cycle could be one of the most expensive with more dollars than usual being poured into television and Internet advertising, the analyst says. Additionally, the 2008 Olympics will command some of the most extensive coverage than in the past.
Shares of DG Fast Channel (DGIT) gained $1.04, or 5.86%, to $18.78 at 11:16 a.m. ET. Shares of DG Fast Channel have been trading in the range of $9.60 to $25.50 for the past 52 weeks.
