ViacomCBS Subscription Numbers Make Barrington Bullish

ViacomCBS Inc VIAC has made better-than-expected progress in direct-to-consumer subscriber growth and there are early signs of success of its integration efforts, according to Barrington Research.

The ViacomCBS Analyst

Barrington’s James Goss reinstated coverage of ViacomCBS with an Outperform rating and $30 price target. 

The ViacomCBS Thesis

It was in question whether the newly combined ViacomCBS entity would be able to smoothly integrate assets amid the COVID-19 pandemic, Goss said in a Monday note. (See his track record here.)

Although key revenue and profitability metrics declined in the quarter, both reported and prospective subscriber gains for paid subscription services as well as progress in monthly active users for the Pluto TV AVOD service “fuel optimism that the seeds of growth for the merged entity are taking root more quickly than we were envisioning," the analyst said. 

The stock is trading at depressed levels, and there is significant upside, he said.

While challenges remain, the subscriber and usage figures as well as initiatives like the potential launch of an expanded streaming service that combines CBS All Access programming and technology with Viacom’s key networks and some Paramount films warrant the bullish rating, Goss said.

The continued dominance of the CBS Television Network and O&O group also boost the company's prospects, the analyst said. 

VIAC Price Action

Shares of ViacomCBS were up 0.58% at $18.18 at the time of publication Monday. 

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