AMC Networks Inc.’s stock swung to 1.3% drop in morning trade Thursday, after the TV network’s third-quarter sales miss was enough to flip Albert Fried & Co. analyst Rich Tullo to bearish from bullish. The stock had fun up as much as 6.4% in the opening minutes, as earnings beat expectations, before turning sharply lower. Tullo cut his rating to underweight, after being at overweight for the last 2 1/2 years, saying AMC’s results validate his “ad recession” thesis, making the stock “dead money.” Tullo also slashed his stock price target by more than half to $37, which is 24% below current levels, from $76. “The data suggests [AMC Networks] has a mounting TV ratings problem excluding ‘The Walking Dead’ which is sun setting,” Tullo wrote in a note to clients. He said that prior to “The Walking Dead” season 7 premier, AMC ratings were down about 27% in the fall. He said “The Walking Dead” drives about $175 million of AMC’s annual revenue, which is about 6.3% of the FactSet 2016 revenue consensus of $2.77 billion. The stock has tumbled 35% year to date, while the S&P 500 has gained 2.8%.
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