Shares of ViacomCBS (VIACA) - Get Report (VIAC) gained on Friday after two analysts gave their respective seals of approval for the newly merged company, and also raised their one-year price targets on expectations that "synergies" and cost-savings will translate into higher revenue and earnings.
Shares of the New York-based media giant were up about 1% at $38.06 on the New York Stock Exchange on Friday morning after BofA Merrill Lynch analyst Jessica Ehrlich resumed coverage of the stock with a buy rating and $60 price target.
In a note to clients, Ehrlich said she sees “improved scale” in the combined company as well as the potential to realize more than $500 million in synergies by 2021.
Meantime, J.P. Morgan also reinstated coverage of ViacomCBS with a recommendation of overweight and a one-year price target of $50.
The positive coverage follows other analysts' recent accolades toward the company, which finalized its merger on Dec. 4, and is now officially run by former Viacom President and CEO Bob Bakish. Sumner Redstone's daughter Shari Redstone is chairwoman of ViacomCBS.
Credit Suisse on Dec. 3 maintained its outperform recommendation on the stock with a price target of $52, noting that an "inexpensive" valuation and debt leverage already at management’s likely target, among other factors, should bode well for forward cash flow and earnings.
CBS and Viacom in August announced their blockbuster $28 billion all-stock deal. The merger combines Viacom properties such as MTV, Nickelodeon, Comedy Central and the Paramount film and TV studio with CBS's broadcast network and Showtime premium network.