Analyst downgrades Viacom shares rating

7:39 AM PST 08/06/2010 by Georg Szalai, AP

Tony Wible downgrades from 'buy' to 'neutral'

NEW YORK -- Janney Montgomery Scott analyst Tony Wible on Friday downgraded his rating on shares of Viacom from "buy" to "neutral, "arguing that "the company's positives are largely offset by risk and the fruition of catalysts."

The stock is close to his fair value estimate of $39.

Wible argued that the advertising recovery in particular is a known fact to investors and should therefore already be priced into the stock.

Also, "the company's dependence on advertising leaves it more exposed than other big media conglomerates to the fear of another round of economic deterioration."

Plus, while Viacom management on Thursday said it benefits from its day-and-date DVD releases to DVD rental kiosk operator Redbox, Wible argued that "deals with cheap rental providers may cannibalize long term results at Paramount."
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