Wunderlich Securities lowered its price target on Viacom, Inc. VIAB from $119 to $98 in a report issued Monday. The firm maintained a Buy rating.
Analyst Matthew Harrigan cut the price target due to concerns over lower advertising estimates and an increase in volatility. Without adjusting for volatility the new price target would have been $108.
Harrigan noted that "we are now assuming a 5.9 percent decline in September quarter domestic advertising vs. down 1.9 percent formerly, with F2015 domestic advertising down 0.8 percent vs. up 3.0 percent."
The report commented that upside was forecasted in Paramount studio results for fiscal 2015 with film operating income up near 30 percent to $288 million and FQ4 2014 operating income at $231 million.
The report estimated "that Viacom is trading at an 11.3x F2015 P/E, an 8.5x EBITDA ratio, and a 9.6 percent free cash flow yield. Viacom shares are now down 18.0 percent ytd vs. the S&P 500 up 2.1 percent."
Viacom, Inc. closed at $69.31 Friday, up 1.58 percent.
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