Evercore Partners analyst Alan Gould on Wednesday raised his price target for AMC Networks, saying that its high-profile trial against satellite TV giant Dish Network "is going even better than expected."
His new target price for the stock of the company behind such cable networks as AMC, IFC and Sundance Channel is $43, up from $41.
He now assigns an 85 percent chance of a legal settlement worth $1 billion, up from his previous estimate of an 80 percent chance for a $600 million settlement. Under that scenario, AMC Networks' channels would be restored to Dish, which dropped them mid-year.
Gould also said there is 14 percent chance of a settlement at $3.5 billion, including damages and interest, with the channels remaining off Dish.
He now only sees a 1 percent chance that AMC could lose the litigation and see its channels stay off Dish, down from his prior estimate of a 5 percent chance.
"Evidence has shown that Dish had more HD customers than previously claimed, and damaging emails seem to prove Dish was aware that Voom's required annual spend could include non-programming costs," Gould wrote in his report Wednesday.
On Tuesday, Davenport & Co. analyst Michael Morris had highlighted in a report about the season premiere of AMC hit show The Walking Dead that "even without Dish, Walking Dead shows surge in popularity."
He added: "The popularity of The Walking Dead creates an opportunity for AMC’s distribution partners to target Dish subs."