Janney Capital Boosts PT on Viacom (VIA) on Strong Results and Earnings Leverage

May 1, 2013 3:51 PM EDT
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Price: $38.70 --0%

Rating Summary:
    15 Buy, 25 Hold, 3 Sell

Rating Trend: = Flat

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Janney Capital analyst Tony Wible raised his price target on Buy-rated Viacom (NASDAQ: VIAB) from $65 to $76 following solid second quarter results this morning.

Wible notes that results were strong across all segments and the acceleration of ad revenue and the pacing of sales into the upfront was particularly encouraging. Viacom continues to aggressively buyback shares and maintains a lean expense structure, which provided leverage this quarter but will be more effective for the forthcoming acceleration in growth.

"We recommend VIA as we see continued ratings improvement from programming investments, a more promising Paramount slate, and a lean expense structure capable of producing more earnings leverage," the analyst said. "Furthermore, we see VIA benefiting from its exposure to 2nd screen advertising, new consumer product sales, an incremental Marvel payout, improving FX trends, digital sales, capital structure improvements, and international growth. We believe risk around macro conditions is improving along with ratings to reduce uncertainty in ad revenue that should build into fall 2013. We continue to watch for signs of OTT cannibalization, but have seen this threat stabilize in recent months."

For an analyst ratings summary and ratings history on Viacom click here. For more ratings news on Viacom click here.

Shares of Viacom closed at $63.99 yesterday.

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