Viacom (VIAB) Stock Climbs, Drexel Hamilton Drops Price Target

Shares of Viacom (VIAB) are up today despite a drop in Drexel Hamilton's price target on the stock.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Viacom (VIAB) - Get Report  are up 0.19% to $41.55 this morning as analysts at Drexel Hamilton drop their price target on the stock to $43 from $46.

The firm has a "hold" rating on the entertainment company's stock and an estimate of $1.50 earnings per share for the upcoming quarter.

Much of the drop in price target is attributed to the "impairment" of the "Teenage Mutant Ninja Turtles: Out of the Shadows" film that was released on June 3. The company also released a few films to home entertainment, but the firm added that these were "relatively weak."

A significant longer-term risk is the lack of core franchise films for Viacom in the face of "intense" competition.

However, Drexel Hamilton added that a far larger concern is company's loss of a large subscription video-on-demand contract that analysts are "not sure" Viacom will try to renew.

"The lack of SVOD sales would push our EPS to 90 centers vs. the $1.50 current consensus," the firm said.

Drexel Hamilton added that it is likely Viacom will see positive ad growth in the second half of fiscal year 2017.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and notable return on equity. However, TheStreet Ratings also finds weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

You can view the full analysis from the report here: VIAB

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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