BTIG Upgrades Viacom As Redstone Initiates Regime Change

Earlier Thursday, Sumner Redstone's National Amusements ousted five directors -- including CEO Philippe Dauman -- from Viacom, Inc. VIAB's board.

BTIG upgraded Viacom to Buy, citing a regime change as the main driver of their promotion.

Investors lost confidence in Dauman and the Board, but started to become more constructive in recent weeks, BTIG noted. The Sumner Redstone saga has made them believe a Board and management reshuffle may come soon. In fact, BTIG analysts "are growing increasingly confident that National Amusements (owned by 80% owned by Sumner Redstone and 20% owned by Shari Redstone), the controlling shareholder of Viacom and CBS, will replace a majority, if not all of the Viacom Board outside themselves and replace a significant portion of the Viacom executive management team."

However, the note continued, Viacom’s current share price doesn't reflect, at least not completely, the value of a new Board and management team, and "the protection their distribution footprint would receive from a recombination with CBS."

The analysts set a one-year price target of $55.