ViacomCBS Stock Rises as Wells Fargo Lauds Streaming Strategy
ViacomCBS (VIAB) – Get Report shares rose on Wednesday after Wells Fargo upgraded the entertainment giant to overweight from equal weight and lifted its price target to $60 from $45.
Wells Fargo analyst Steven Cahall acted as Viacom and Comcast (CMCSA) – Get Report unveiled a partnership to launch a video-on-demand subscription service in more than 20 European markets, encompassing 90 million homes.
Viacom recently traded at $41.37, up 6%. Comcast recently traded at $59.47, unchanged.
“VIAC’s streaming efforts are bearing fruit and have impressed us, so we move from historical bears to constructive bulls,” Cahall said.
“The upcoming slate for Paramount+ should maintain the momentum, and we think the company is one of the better bets for industry consolidation. Hulu-esque valuation for streaming drives the upside to our new, $60 price target.”
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The venture with Comcast, SkyShowtime, will bring together content from NBCUniversal, Sky and ViacomCBS portfolio of brands. This includes titles from Showtime, Nickelodeon, Paramount Pictures, Paramount+ Originals, Sky Studios, Universal Pictures, and Peacock.
The new service is expected to launch in 2022, subject to regulatory clearance. Subscription prices for SkyShowtime will be announced later, the companies said.
In June Comcast said rumors that it was considering a bid for ViacomCBS were “pure speculation.”
Citing sources, The Wall Street Journal reported that Comcast Chief Executive Brian Roberts had considered a transaction with ViacomCBS or an acquisition of Roku (ROKU) – Get Report. At the same time he made clear that Comcast doesn’t need to pursue a merger to grow its TV, movie and streaming portfolio.