Nomura Securities Maintains a 'Buy' on Viacom (VIA-B); Ratings Weakness Offset By Cost Saves

Nomura Securities maintains a 'Buy' on Viacom (NYSE: VIA-B) price target lowered $1 to $54.

Nomura analyst, Michael Nathanson, said, "Given the reduction in domestic ad growth forecasts in F4Q due to weak ratings, the company’s reluctance to provide forward F1Q ad trending commentary and seemingly inexplicable declines in Nickelodeon, FY2012 has started off on the wrong foot. Unfortunately for Viacom, the decline at Nick continues to accelerate and Nick’s advertising sales (due to heavy promotion of toys, movies and other gifts) is most heavily skewed to the holiday calendar fourth quarter."

"Given the continued slide in Nick’s ratings, we think it makes sense to
revisit our F1Q and FY12 estimates. We are lowering our US ad estimates to 3% in F1Q and 3.4% for FY12. However, our EPS remains unchanged for both the quarter and full year at $1.06 and $4.35, respectively, due to flexibility in the cost structure and slightly higher Entertainment estimates."

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 $42.62 yesterday.

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