UPDATE: Wunderlich Upgrades Viacom to Buy Following FQ2 Results

In a report published Thursday, Wunderlich Securities analyst Matthew Harrigan upgraded the rating on Viacom

from Hold to Buy, and raised the price target from $72.00 to $80.00. In the report, Harrigan noted, “Although we are barely altering our model and valuation analysis following FQ2 Viacom (VIAB) results, we are now subjectively comfortable enough on network and studio outlook to emphasize an $80 F2014 price target - justifying an upgrade to Buy. We assume only 4% vicinity ad growth through F2017. An assumption of no fair 18-month appreciation from the current price would imply negative 1% ad growth through F2017 if affiliate fee and studio profit estimates are realized. Although the MTV Network group is the operative valuation backbone with a 90% contribution, we do perceive marginal upside at Paramount off Star Trek Into Darkness and World War Z. Any near-term continued discount to fair value would incidentally enable Viacom to better benefit from $2.8bn in F2013 buybacks.” Viacom closed on Wednesday at $65.90.