Nomura Boosts Price Targets on Viacom (VIA) and Time Warner (TWX)

Nomura raised their price target on Viacom, Inc. (NYSE: VIA) (NYSE: VIA-B) from $54 to $56 and Time Warner Inc. (NYSE: TWX) from $39 to $42 on a higher market multiple.

Analyst Michael Nathanson comments that with both stocks near relative valuation troughs, investors have started to ask them what needs to occur for the market to re-rate these assets.

At Viacom, they look to to 4Q11 when Nickelodeon anniversaries the "black swan" declines. "Strong affiliate fee growth plus international acceleration and continued buybacks should help drive upside to shares," Nathanson comments.

At Time Warner, the concern remains ratings and financial performance of the Turner Networks. "TBS has ratings momentum with The Big Bang Theory and cost structure stability. An acceleration of affiliate fee growth at Turner would give support to earnings stability and help valuation," he said.

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