We upgrade our recommendation for Viacom (VIA.B) to Outperform ahead of its first quarter 2010 financial results.
An improving economic outlook, together with Viacom’s disciplined management team, highly complementary mix of assets, and a healthy financial position, keep us optimistic about the company’s future growth prospects. The company is likely to benefit from rising sales of its Paramount movies and an improving advertising market.
The stock is currently trading at significantly low multiples with respect to several valuation metrics compared to its peers, which we believe does not adequately reflect the true growth potential of the company. Viacom enjoys strong brand value with respect to several TV channels.Zacks Investment Research
