Pali Capital Rich Greenfield raised earnings estimates and its price target for Viacom after the media company "meaningfully" exceeded his expectations in third-quarter results today.
Greenfield raised his price target to $34 from $33 for Viacom, parent of the Paramount studio and cable networks including MTV, VH1, Nickelodeon, Comedy Central and Spike TV. He raised his earnings estimates for 2009 (to $2.40 per share) and 2010 ($2.53), including a new fourth-quarter estimate of $0.92 per share in 2009. His prior estimates for per-share earnings were $2.15 in 2009 and $2.35 in 2010. He has a "buy" rating on the stock.
Viacom at about 4 p.m. was trading at $28.68, up 63 cents (2.24%), according to the company Web site.
Greenfield said he expects only slight improvements in ad trends through 2010: another 4% domestic ad decline in the fourth quarter, after a 4% dip in Q3, and a 3% domestic ad decline in 2010. "If MTV ratings were able to turn the corner in 2010, there would likely be meaningful upside to our forecast," he said in a note to investors.
He expects strong film results in the fourth quarter but a decline in the studio's EBITDA in 2010.
