ViacomCBS (VIAC) Stock Falls Sharply on EPS Miss, Renames to Paramount; Analyst Says Catalyst Path Remains Unclear
Shares of ViacomCBS (NASDAQ: VIAC) are down more than 14% in premarket trading on Wednesday after the company reported worse-than-expected Q4 2021 results.
The company reported adjusted EPS from continuing operations of 26 cents, compared to the 45 cents per share consensus. EPS from continuing operations were reported at $3.05.
ViacomCBS reported streaming revenue of $1.32 billion, topping the consensus estimates of $1.26 billion. The number of added global streaming subscribers stood at 9.4 million.
Revenue came in at $8 billion, beating the analyst consensus of $7.48 billion and up 16% from the year-ago period.
The number of total global streaming subscribers rose to over 56 million, with Paramount+ adding 7.3 million subscribers. Pluto TV reported revenue growth of 45% YOY $362 million and added 10 million monthly active users in the quarter.
“When it comes to realizing our streaming goals, we’re moving fast and gaining even more speed,” said CEO Bob Bakish.
ViacomCBS also announced it is renaming itself Paramount, aligning with its Paramount+ streaming service.
However, this was not enough to convince BofA analyst Jessica Reif Ehrlic, who downgraded to Neutral from Buy with a price target of $39.00 per share from the prior $53.00.
“Our prior bullish thesis, was largely predicated on VIAC being a potential attractive target amid a wave of industry consolidation. Our views on this have not changed, however it does not appear a potential sale is imminent given VIAC’s near term streaming aspirations. We now head to the sidelines given the near/intermediate term headwinds from streaming content investments,” the analyst wrote.
Guggenheim analyst Michael Morris reiterated a Buy rating but lowered the price target to $40.00 per share from the prior $53.00.
“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).”
BMO analyst Daniel Salmon added that “this strategic clarity will ultimately help build long-term value, but we look to gain more conviction in potential upside to near-term expectations and clarity on catalysts over the NTM, as investment remains the primary theme.”
By Senad Karaahmetovic | [email protected]