UPDATE: Credit Suisse Downgrades ViacomCBS (VIAC) to Underperform
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Credit Suisse analyst Douglas Mitchelson downgraded ViacomCBS (NASDAQ: VIAC) from Neutral to Underperform with a price target of $37.00 (from $28.00).
The analyst comments "We have been vocal regarding improvements in the TV advertising marketplace and in the pace of pay TV subscriber declines, and we acknowledge management’s efforts to offset secular headwinds and perhaps create net value through building and expanding streaming platforms. Still, the 91% increase in VIAC stock price over the past 3 months (vs. S&P500 +12%) puts the company’s valuation substantially above our target price and in line with our Blue Sky scenario (which contemplates a full COVID recovery, strong mgmt execution and capital allocation, content and streaming success, and a reasonable NFL renewal). Thus, while we expect continued recovery-boosted results the next few quarters, shares have more than captured appropriately risk-discounted upside potential, suggesting an Underperform rating is appropriate until valuation has normalized."
Shares of ViacomCBS closed at $56.00 yesterday.
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