Wells Fargo upgraded Viacom (NASDAQ: VIAB) from Market Perform to Outperform and raised its valuation range to $48-50 from $38-40 following results this morning which they said prove the turnaround has begun.

Analyst Marci Ryvicker commented, "We don’t do this often – upgrade on a first look at numbers. But, today’s results prove to us that the turnaround is real and likely to continue. From a very high level, everything beat – revenue by 480bps, OI by 1,240bps and EPS by $0.17. We also think that the strategic plan CEO Bakish has put in place makes sense – and is somewhat similar to what TWX implemented a few years ago (i.e. recall that TWX got rid of the “silos” that had existed between its various brands, as well as between its domestic and international segments), which seemed to have worked. While the conference call is yet to begin (it’s at 8:30 am ET), we don’t need to wait. We think today’s results & strategic overview are enough to move Street numbers higher and to boost VIAB’s severely discounted valuation. While we do NOT believe VIAB warrants the same NTM P/E multiple as its peers, we do think the current 5x discount should narrow. Hence, we upgrade to Outperform from Market Perform, boost our val to $48-50 (12.5x NTM P/E vs. the sector average of 14.5x) from $38-40, and raise our F’17 and F’18 ests.to $4.10 and $4.19 from $3.93 and $4.04, respectively, due to the flow through of today’s results."

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Shares of Viacom closed at $42.07 yesterday.