How Wall Street Views on ViacomCBS Have Evolved

When Viacom and CBS Corp. closed their recombination in December, many Wall Street analysts said that the new ViacomCBS would have to prove the financial and strategic benefits of the latest entertainment industry mega-deal. In February, when the merged company, led by CEO Bob Bakish, unveiled its first quarterly earnings report,on weaker-than-expected results and doubts about the company's streaming strategy. And then the novel coronavirus pandemic dealt the stock another blow.

Explained the analyst: "We believe COVID-19 is a catalyst for ViacomCBS to push through cost-cutting synergies from the merger with CBS faster than expected; and we believe there is significant hidden value in Paramount's library and in ViacomCBS streaming services," as well as the former CBS headquarters building in Manhattan and publisher Simon & Schuster, both of which management has said it will sell.

Similarly, Macquarie Capital's Tim Nollen in a June 19 report raised his 2020 financial estimates and his target price by $8 to $26, while continuing his "neutral" rating on ViacomCBS. "Cost savings through the merger should lead to better earnings," he wrote. "The company is front-loading the effort with $200 million in restructuring costs in the first quarter alone, versus [its] target of $250 million in cost synergies for the full year 2020.

And she concluded: "In the low $20 range - and certainly in the teens - ViacomCBS is simply not priced appropriately for the ultimate value of its content and brands." She also sees the potential for a "next leg higher," but said that will "require investors gaining confidence in the company’s streaming and third-party licensing strategy."

CaptainBadger79 ViacomCBS , I wouldn't pat myself on the back just yet. The fact that ViacomCBS has decided to go with the same lineup for the fall season doesn't mean it's not the same as CBS . ScorpionCBS fans haven't heard a whisper of a renewal. BobBakish Scorpion needs a season 5.

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