NEW YORK (TheStreet) -- Shares of Viacom (VIAB) are advancing 1.76% to $67.25 in Wednesday's early morning trading session as analysts at Credit Suisse initiated coverage of the company with an "outperform" rating and a price target of $85.
The firm pointed out that the entertainment content company has been at the epicenter of investor debate about the future of the bundle, which has caused significant multiple compression. However, analysts see recovery potential and believe the risks of near-term disruption to the company's business are modest.
While the core cable networks face some structural challenges, which are now well-known, ratings could stabilize in the second half of 2015, analysts noted.
Additionally, their forecasts include successful cost savings realization with limited topline impact from the announced restructuring program.
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 notable return on equity, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and a generally disappointing performance in the stock itself."