Following a strong day in media stocks Viacom (VIAB) received a price target increase from Deutsche Bank from $57 to $62.
In concert with the increase, the analyst commented, “The primary debate for Viacom remains whether Nickelodeon’s 20+% viewership declines are secular (kids shifting media consumption online) or cyclical (kids are just watching Disney & Cartoon Chn’l instead). We continue to believe the decline is predominately cyclical and expect that will become clear the next 5 months. If correct, then some or all of Viacom’s 20% relative LTM underperformance should unwind. Also key remains return of capital (14%/yr of public equity) & strong affiliate fee growth.”
Given Viacom’s $53.55 close yesterday Deutsche Bank’s $62 target implies 15.8% share price upside from current levels.
The Bottom Line
Shares of Viacom (VIAB) have a 2.05% dividend yield, based on last night’s closing stock price of $53.55. The stock has technical support in the $48-$50 price area. The shares are trading near all-time highs.
Viacom (VIAB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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