Viacom (VIAB) Stock Downgraded at Deutche Bank
NEW YORK (TheStreet) -- Viacom (VIAB) - Get Report was downgraded to "hold" from "buy" at Deutsche Bank on Sunday.
The firm maintained its price target of $56 on the stock.
Deutsche Bank attributed its rating downgrade to the stock's recent strength. Shares of the company have appreciated about 35% from their low on August 26 to come within $4 of the firm's price target.
Viacom's growth outlook is behind that of its peers because non-sport and non-live event advertising will likely continue to decline, and Viacom does not offer any sports programming to overcome this impact, Deutsche Bank notes.
Domestic advertising revenue is expected to decrease by 4% in fiscal 2016 and 2% in fiscal 2019, the firm adds.
Viewership will probably continue to decline as well, but will be partially offset by better measurement and pricing, according to Deutsche Bank.
Viacom stock closed up by 0.96% to $52.71 in Friday's trading session, and is flat in pre-market trading today.
Separately, TheStreet Ratings team rates VIACOM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate VIACOM INC (VIAB) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 20.8% when compared to the same quarter one year prior, going from $732.00 million to $884.00 million.
- VIACOM INC has improved earnings per share by 28.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VIACOM INC reported lower earnings of $4.75 versus $5.45 in the prior year. This year, the market expects an improvement in earnings ($11.96 versus $4.75).
- Although VIAB's debt-to-equity ratio of 3.47 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, VIAB maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has declined marginally to $1,233.00 million or 0.08% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VIACOM INC has marginally lower results.
- You can view the full analysis from the report here: VIAB
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.