Piper Jaffray Cuts Price Target On Coinstar (CSTR)

Piper Jaffray cut its price target on shares of Coinstar Inc. CSTR to $56 from $74, but kept its Overweight rating after it cut its earnings forecast. In a note sent to clients, Piper Jaffray writes, "After market close on 1/13 Coinstar pre-announced Q4 revenue of $391m vs. Street consensus of $426.8 and lowered EPS guidance to $0.65-$0.69 vs. the Street at $0.84. The company indicated that 28-day delay titles and Blu-ray rentals did not perform as well as it was expecting during the quarter. The company's visibility into go-forward numbers appears to be low as it navigates the first year of managing Redbox under the 28 day delay titles and through the transition to Blu-ray. While the company may not yet have a handle on the outlook for the business, the real question is whether or not the DVD kiosk story is over and our take is that kiosks will continue to gain share over the next couple of years. While this is a huge disappointment vs. expectations, we are maintaining our OW rating." Shares of CSTR are off $14.40 in pre-market trading to $42.55.