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NEW YORK – Miller Tabak analyst David Joyce on Tuesday upgraded his rating on the stock of entertainment giant Viacom from “neutral” to “buy,” citing a stronger-than-expected film performance in the latest quarter.
“We are increasing our filmed entertainment, but decreasing our media network advertising estimates,” he wrote in a report, suggesting that the expected stronger Paramount Pictures performance will offset weaker cable networks ratings and advertising revenue driven by lower ratings at Nickelodeon. Said Joyce: “The filmed entertainment results could offset the Nickelodeon ratings seesaw.”
The analyst removed his lower short-term price target on the stock, but kept his longer-term $56 target on the class B shares of the company. Overall, he raised his revenue and earnings expectations for its fiscal first quarter, which is the final quarter of calendar year 2011.
In Viacom’s film unit, Joyce boosted his forecast for theatrical revenue to $593 million, versus his prior $381 million estimate. The latest quarter’s Paramount releases included Hugo, The Adventures of Tintin and Mission: Impossible – Ghost Protocol.
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