Viacom Shareholders Likely In For A Sustained Turnaround Period

Argus maintained a Hold rating for Viacom Inc. VIAB after the media giant cut its dividend in half to $0.20 and dismissed Interim CEO Tom Dooley on Wednesday.

“While the board’s moves were not unexpected,” explains analyst Joseph Bonner, “Viacom is likely in for a sustained turnaround period.”

Argus favored former CEO Phillippe Dauman’s plan to sell minority interest in paramount, a plan that has since been shelved.

In order to receive a Buy rating, Bonner says Argus will need to see traction in Viacom’s core Media Networks segment. Additionally, Bonner says that Viacom faces a crucial decision in picking a new executive.

"The board will need to hit a home run when it selects the new CEO," says Bonner. "An industry veteran like former Fox Deputy Chairman Chase Carey, or perhaps ex-Summit/Lionsgate co-Chair Rob Friedman, would likely get cheers from the investment community and perhaps staunch the downward slide in VIAB shares."