Nomura Securities Maintains a 'Buy' on Viacom (VIAB); At Stake: Millions of DirecTV (DTV) Customers
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Price: $66.87 --0%
Rating Summary:
7 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 2 | New: 2
Rating Summary:
7 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 2 | New: 2
Trade VIAB Now!
Nomura Securities maintains a 'Buy' on Viacom (NASDAQ: VIAB) price target of $54.00 (from $57.00).
Analyst, Michael Nathanson, commented on the affiliate agreement between Viacom and DirecTV (NYSE: DTV), which is set to expire tonight. Viacom is asking for more, arguing that its networks account for almost 20% of all viewing for DTV, but are less than 5% of programming expenses.
Nathanson said, "We believe that this negotiation between Viacom and DirecTV will turn negative very quickly if there is no deal reached by the deadline tonight. Viacom ultimately largely received the increases they were seeking during the company’s Time Warner Cable (NYSE: TWC) affiliate fee negotiations on New Year’s Eve, Dec 31, 2008. However, before the agreement, Viacom used its large repertoire of personalities and characters to put the pressure on Time Warner Cable to sign a new deal, including pictures of Dora crying about the thought of going off the air. Viacom has already launched its website with a short video reacting to DTV dropping its networks (www.whendirectvdrops.com) and a Facebook (Nasdaq: FB) page (www.facebook.com/WhenDirecTVDrops). Given the younger skewing Viacom content, we would not be surprised to see this video and other company marketing campaigns continue to target social media to gain traction quickly among DTV’s audience base."
Nomura and Nathanson ultimately expect Viacom to receive affiliate fee step-ups of at least high-single digits, and VIAB isn't concerned about short-term quarterly impacts. On a P/E basis, shares of Viacom are cheap and patient investors should be rewarded.
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 $47.61 yesterday, with a 52 week range of $41.72-$49.85.
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Analyst, Michael Nathanson, commented on the affiliate agreement between Viacom and DirecTV (NYSE: DTV), which is set to expire tonight. Viacom is asking for more, arguing that its networks account for almost 20% of all viewing for DTV, but are less than 5% of programming expenses.
Nathanson said, "We believe that this negotiation between Viacom and DirecTV will turn negative very quickly if there is no deal reached by the deadline tonight. Viacom ultimately largely received the increases they were seeking during the company’s Time Warner Cable (NYSE: TWC) affiliate fee negotiations on New Year’s Eve, Dec 31, 2008. However, before the agreement, Viacom used its large repertoire of personalities and characters to put the pressure on Time Warner Cable to sign a new deal, including pictures of Dora crying about the thought of going off the air. Viacom has already launched its website with a short video reacting to DTV dropping its networks (www.whendirectvdrops.com) and a Facebook (Nasdaq: FB) page (www.facebook.com/WhenDirecTVDrops). Given the younger skewing Viacom content, we would not be surprised to see this video and other company marketing campaigns continue to target social media to gain traction quickly among DTV’s audience base."
Nomura and Nathanson ultimately expect Viacom to receive affiliate fee step-ups of at least high-single digits, and VIAB isn't concerned about short-term quarterly impacts. On a P/E basis, shares of Viacom are cheap and patient investors should be rewarded.
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 $47.61 yesterday, with a 52 week range of $41.72-$49.85.
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