Deutsche Bank analysts have suggested the multinational media and entertainment group ViacomCBS as the top stock choice for 2022, noting that it is trading at a lower valuation than its competitors, and predict that the company could become the next “giant” of streaming, thanks to huge content library at its disposal.
Deutsche Bank recently upgraded its ViacomCBS recommendation to buy and raised its share price target to $ 43 – that is, 23% higher than its current price of almost $ 35.
Analysts say ViacomCBS’s strengths are streaming, as the company now spends billions of dollars on content – yet it remains undervalued compared to competitors such as Netflix and Disney.
Viacom’s value may lag behind other established streaming giants, “but its annual content budget puts it on an equal footing,” according to analysts.
The Group’s high profile is due to its huge portfolio of popular content brands, such as the CBS television networks and the subsidiaries Comedy Central, Showtime, Paramount Network and Pluto TV.
Deutsche Bank is optimistic about the streaming service launched last year by the Group, Paramount +, which includes “Yellowstone” – the most popular cable TV show in recent times – and the “1883” prequel series.
ViacomCBS fell 1.3% on Monday, while on Tuesday it added 0.14% to the aftermath of the recent upgrade by Deutsche Bank. In 2021 its share “dipped” over 20%, however since the beginning of the year it gains more than 8%.
“Although not everyone will succeed in streaming, we believe that Viacom has the opportunity to successfully implement its business model in this area as well, taking into account its portfolio (including sports content rights),” its analysts said. Deutsche Bank. “We understand the skepticism. However, Viacom has the rights to content that is – and will continue to be – successful.”
ViacomCBS lists 47 million subscribers worldwide to the streaming platforms Paramount + and Showtime. Its main competitors – such as Netflix, Disney and WarnerMedia’s HBO Max – have around 214 million, 118 million and 69 million subscribers, respectively.
Optimistic about the future of Viacom is the founder and president of Ariel Investments, John W. Rogers, who, in an interview with Forbes in December, singled out the Group’s share among the top investment options for 2022. In addition to that ViacomCBS has a “wider range of content” than many of its competitors, Rogers estimates that the company is accumulating great value, as it makes significant investments in streaming service and its subscribers are growing.
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Source: Forbes
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