Monday, November 22, 2010

Viacom (VIA-B) Gaining on Increased Advertising Revenue

Advertising revenue is again driving results for Viacom (NYSE:VIA-B), as new client money enters the fold and current advertisers raise their spend.

Nomura Securities said, "Our analysis of Viacom’s advertiser base in CY3Q:10 shows that the improvement in growth was fueled by a combination of strong increases by Viacom’s endemic advertisers and the introduction of new client money...In FY2011, we now estimate domestic ad growth of 7.5% skewed more to the early half of the fiscal year. As mentioned above, Viacom is benefitting from the return of core ad clients and the arrival of new ones. Given the relative attractive valuation of Viacom vs. cable network pure plays, we believe investors will continue rotating into Viacom if ad growth meets our forecast."

Earnings per share for full year 2011 was increased from $3.28 to $3.35 and for full year 2012 from $3.64 to $3.76. Nomura maintains their "Buy" rating on the entertainment company.

Viacom closed Friday at $38.39, falling by $0.06, or 0.16 percent. Nomura has a price target of $46 on them.

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