Nomura Reiterates Rating for Viacom; Lowers Price Target (VIAB)

Nomura Group has reaffirmed its current rating on entertainment content company, Viacom, Inc.(VIAB), but has lowered its price target Friday.

The firm has maintained its “Buy” rating for VIAB, and has lowered its price target from $58 to $57. This price target suggests a 13.6% increase over the stock’s current price of $49.23.

An Normura analyst noted, “F4Q better than expected, with EPS of $1.21 (vs our $1.16) and US ad -6% (vs our -7% est). Mgnt set foundation for strong 2013: optimism that ratings will improve on easy compares and new program talent; affiliate fees (42% of network rev) on track for very high high-SD to low-DD growth; and continuing buybacks of $2.5bn of shares. For F1Q, we cut EPS by $0.04 to $0.94, with improving US advert trends (-4% Y/Y, unchanged) but slower intl advert (-10% Y/Y). We raise our FY13E EPS on F4Q beat and lower Cable Network exp. At 10x CY13E EPS, we see stock as really cheap for patient investors.”

Viacom shares were mostly flat during premarket trading Friday. The stock is up 8.41% YTD.

The Bottom Line
Shares of Viacom (VIAB) have a 2.23% dividend yield, based on last night’s closing stock price of $49.23. The stock has technical support in the $44-$46 price area. If the shares can firm up, we see overhead resistance around the $52 price level.

Viacom, Inc.(VIAB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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