UPDATE: ISI Group Initiates Coverage on Viacom on Advertising Rebound, Margin Expansion

In a report published Wednesday, ISI Group analyst Vijay Jayant initiated coverage on

with a Buy rating and $95.00 price target. In the report, ISI Group noted, “We are initiating coverage of Viacom (Viacom) shares with a Buy rating and a $95 price target at year-end 2014. Almost all of Viacom's operating income (OI) comes from its portfolio of cable networks typically programmed for younger viewers – Nickelodeon, MTV, VH1, Comedy Central, BET, among others. These networks are starting to exhibit some improvement in ratings and advertising, which is key to our investment thesis. Good original content creation and brand development remains the key to success. Moreover, we think operating leverage will be exhibited over the next few years as the company takes more costs out of the business and the creative process due to technological enhancements. Viacom also owns Paramount Studios, which has been downsized to distribute fewer third-party films as it focuses on producing its own franchises. Paramount's profits only equate to the aggregate of corporate overhead and stock compensation.” Viacom closed on Tuesday at $80.75.