ViacomCBS Rebrand Brings in Scathing Bear Note

Bank of America downgraded the stock to "neutral"

Deputy Editor
Feb 16, 2022 at 9:40 AM
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The shares of ViacomCBS Inc (NASDAQ:VIAC) are tumbling this morning, after the company announced during its investor day presentation that it will soon undergo a major rebranding as it makes a shift toward becoming a streaming-focused company called Paramount Global. Separately, the firm reported fourth-quarter earnings that missed analysts' estimates, though its revenue topped expectations. VIAC was last seen down 15.3% at $30.49, set to open at its lowest level in nearly a month. 

Bank of America isn't buying the rebrand, lowering its price target to $39 from $52, and cutting its rating to "neutral" from "buy." The analyst criticized ViacomCBS' "swinging for the fences" mentality, and noted that its previously bullish outlook was largely based on the company being an "attractive target amid a wave of industry consolidation." 

Analyst sentiment, meanwhile, is split. Heading into today, eight covering brokerages called the stock a "buy" or better, while seven said "hold." Meanwhile, the 12-month consensus price target of $43.13 is a 41.1% premium to last night's close. 

Options traders have taken a more bullish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day put/call volume ratio of 6.21, which stands higher than 82% of readings from the past year. In other words, these traders have been picking up puts at a much quicker than usual clip during the past 10 weeks. 

VIAC is down over 38.3% year-over-year, though it still sports a small gain for 2022. The equity has seen continuous pressure at the 140-day moving average for almost a year, with the trendline snuffing out two rally attempts this year already. The $30 level could hold as a floor on the charts, as it did help capture VIAC's pullback last month. 

 

 




 
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