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RBC Capital Markets analyst Drew McReynolds nudged up his target price and earnings estimates for Corus Entertainment Inc. (CJR) on Thursday, to reflect, among other things, higher expected growth in pay TV subscribers following the introduction of HBO Canada.

Mr. McReynolds expects the television division to drive earnings growth next year, thanks to HBO Canada and more revenue from expanded carriage of (on Rogers) of Cosmo TV.

The radio division will likely see only slight growth in revenue, as cost savings from restructuring of radio operations (including the closure of a station in Quebec City) will likely be offset by a sluggish economy.

Mr. McReynolds estimates the company will turn a profit of C$275-million in 2009, right in the middle of the company’s most recent guidance of between C$270-million and C$280-million. He also raised his target price from C$23 to C$24.

Corus said it would implement a Dividend Reinvestment Plan starting Nov. 1.

Source: RBC Analyst: HBO Canada Good News for Corus Entertainment