Wunderlich Reiterates on Viacom After Deal Renewal With Time Warner Cable

In a report published Thursday, Wunderlich Securities analyst Matthew Harrigan maintained a Buy rating on Viacom, Inc. VIAB, with a price target of $103.00.

According to the report, Viacom and Time Warner Cable have recently announced a Christmas Eve MTV Networks renewal between Viacom and Time Warner Cable that seemed congruent with affiliate fee growth and affords more versatility to consumers.

“Critical new TV Everywhere access inside and outside the home has cross device appeal for MTV Networks' youth demographics, and moves the deal beyond a naked price increase,” the report said. “Even with the stock near an all-time high, we estimate that the price implicitly discounts unlikely near flat MTV network ad receipts through F2018, assuming the affiliate path performs to expectation.”

Some highlights from the report included:

-”Broad affiliate fee deal with Time Warner Cable (TWC-$134.04, Hold) prior to 12.31 deadline, includes TV Everywhere in and outside home.”
-”Epix now available to TWC and Brighthouse homes, carriage goes to 40mm from 30mm homes.”
-”The Wolf of Wall Street complements recent success with well marketed Anchorman 2.”
-”Mid-single digit ad growth likely in current quarter, potential 2014 acceleration.”

Viacom closed Tuesday at $85.60.