ViacomCBS (VIAC) PT Lowered to $40 at Guggenheim
Guggenheim analyst Michael Morris lowered the price target on ViacomCBS (NASDAQ: VIAC) to $40.00 (from $53.00) while maintaining a Buy rating following results and rebranding to 'Paramount' "which sets an ambitious investment plan to scale new streaming heights."
The analyst commented, "ViacomCBS management delivered a detailed content presentation that included a rebranding announcement (the company is now Paramount) and much anticipated lifted streaming subscriber guidance and re-segmented financial reporting. Total streaming subscriber estimate guidance is now over 100mm by 2024 (versus prior 65-75mm) with the company on pace to exceed 75mm subscribers by year-end 2022. Subscriber pursuit will come at a higher net investment in 2022 and 2023, with our revised adjusted OIBDA forecast of $3.74bn and $3.28bn, below our prior $4.63bn and $4.66bn. We are optimistic about Paramount’s long-term growth potential, with the 2024 streaming revenue forecast of $9bn showing leverage over the guided $6bn of content investment (note that we forecast a smaller total streaming loss in 2024 compared to 2023, nearing profitability in 2025). Our updated $40 price target (down from $53) reflects the greater near-term investment than previously forecast."