Nomura Securities Maintains a 'Buy' on Viacom (VIA-B); Raising Estimates as Digital Deals Lead the Way

Nomura Securities maintains a 'Buy' on Viacom (NYSE: VIA-B), price target lowered from $58 to $53.

Nomura analyst, Michael Nathanson, said, "Post Viacom’s FY3Q11 results, we are raising FY11 EPS by $0.11 to $3.78 and FY12 EPS by $0.12 to $4.32 rolling through Friday’s Network beat while upping F4Q share repurchases by $200mn to $900mn...We project 4th quarter programming expense of 7% and 11% growth in SG&A expense will lead to 80bps of margin expansion. For the year, we estimate margins of 42%, which we believe will remain flat in FY12 – another conservative assumption."

"We rate Viacom Buy with a new $53 price target (from $58) based on the lower market multiple and increased CY2012 estimated earnings. Given the relative attractive valuation of Viacom vs. cable network pure plays, we believe investors will continue rotating into Viacom if ad growth meets our forecast."

For more ratings news on Viacom click here and for the rating history of Viacom click here.

Shares of Viacom closed at $44.93 yesterday.

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