The share price of Gemstar-TV Guide jumped more than 10 percent early Friday after a brokerage firm upped its target price from $6.70 to $7.10. The stock reached a high of $5.92 Friday morning.
According to the report from Janco Partners Equity Research, Gemstar’s shares have slumped more than 30 percent since Nov. 1, but Janco attributes it to a few large block sales of shares, not a fundamental weakness in the company.
News Corp. recently disclosed its continuing interest in acquiring Gemstar, which produces TV Guide magazine and on-screen TV program listings for cable and satellite systems. However, the Janco report states that “even on a stand-alone basis, Gemstar is undervalued,” and the new target reflects the company’s intrinsic value without an acquisition premium.
