Citi Likes Focus Media After Solid Quarter (FMCN)

Citi Investment Research has a $33 price target and a Buy rating on Focus Media Holding Limited FMCN after the company reported earnings yesterday. In a note sent to clients, Citi writes, "Focus delivered a solid set of 3Q10 results, beating the Street's top and bottom by 3% and 21%, respectively, driven by strength in the core network business and lower operating expense. Looking into 2011, Focus will drive revenues from 1) a price increase of ~10% and improved utilization on LCD network optimization; 2) geographic expansion of the in-store network as well as further segmentation of screen locations within store; 3) expanding aggressively in the movie theater business to grow market share. With prudent control on variable expenses and benefiting from a high fixed-cost structure, Focus may continue to improve margins over time." Shares of FMCN gained 54 cents yesterday to close at $25.43.