Viacom Stock Crosses $52 Mark, Sets New High
Analysts also see further upside in CBS Corp. shares as Wall Street continues to bid up the stocks of the two Sumner Redstone-controlled companies.
NEW YORK Wall Street on Tuesday took its appreciation of the stocks of Sumner Redstone-controlled Viacom and CBS Corp. to a new level.
Viacom shares hit a 52-week high of $52.18, which also marked the highest price since the split of Viacom and CBS at the start of 2006, topping highs set earlier in the year, and the first time that the stock has crossed the $52 mark. At a closing price of $51.95, Viacom¹s market value stood at $30.7 billion, according to Bloomberg data.
Meanwhile, Morgan Stanley analyst Benjamin Swinburne raised his financial forecasts on CBS and boosted his price target by $2 to $33, saying that the company, whose stock he rates at "over-weight," is "more than an ad story" and that it "remains a top pick in media."
Also on Tuesday, RBC Capital Markets analyst David Bank launched coverage of CBS with a bullish "outperform" rating and a $33 target price. "We know that stock has already run quite a bit, but we think both the [price] multiple and earnings still have upside," he said. The stock of CBS set a 52-week and multi-year high of $29.13 last week. The last time it had traded this high was in late 2007.
The bullish sentiment on CBS and Viacom comes even after their shares led the industry pack in terms of stock gains for the first half of 2011 and for last year.
The stock of CBS gained nearly 50 percent over the first six months of 2011 and as of Tuesday, narrowly edging out the growth of Netflix's stock for the first half, and Viacom was up nearly 30 percent as of the mid-year mark and 31.2 percent as of Tuesday. The increases have come on top of a run-up of more than 30 percent each in 2010. That meant that CBS followed by Viacom were the biggest gainers among entertainment conglomerates for 2010 and the opening half of 2011.
Over the past 12 months, CBS shares have yielded a return of 125.5 percent, and Viacom's a return of 71.8 percent, according to Bloomberg data.
Davenport & Co. analyst Michael Morris late last week had mentioned CBS, along with News Corp., as his top industry stock picks. He has a "buy" rating and $32 target price on the stock. Morris said he is "still very positive on their retrans exposure" and believes "local TV ads may be underestimated in the second half" of the year.
Meanwhile, Wunderlich Securities analyst Matthew Harrigan last month maintained his "buy" rating and $60 price target on Viacom, citing its financial performance in both its TV and film businesses.