VIAB (Viacom Class B shares) formerly CBS Message Board

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Technology Stocks : VIAB (Viacom Class B shares) formerly CBS

VIA 53.43

+0.3%

Oct 31 9:30 AM EST

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From: Labrador	1/4/2006 10:39:56 AM
	of 4613

Viacom Is A Top Pick After CBS Spin-Off Kate Tomassi, 01.04.06, 10:10 AM ET Banc of America Securities analyst Douglas Shapiro instituted a 12-month target price of $51 on the “new” Viacom (nyse: VIAb - news - people ) following the company’s split from CBS (nyse: CBS - news - people ) on Dec. 30. The analyst reiterated a “buy” rating on Viacom and rated it a top pick in the entertainment sector. “Although investor psychology has swung dramatically in favor of new media and away from traditional media over the last 18 months, in general we believe that investors will start to turn some attention back to content providers this year as they realize that companies with content hold substantial leverage both in traditional and new forms of distribution,” the analyst said in a report Tuesday. The analyst forecasted 12% EBIDTA growth over three years, “one of the fastest growth rates in ‘traditional’ media,” and rated the stock “inexpensive relative to its free cash flow growth rate.” “Viacom has perhaps the most exposure to new forms of distribution of any of the traditional media companies. We currently only expect broadband and wireless to account for 3% of revenue in the next few years, but to the extent these platforms gain more traction the stock should be a chief beneficiary, financially and psychologically,” said Shapiro. In addition, the analyst said he believes the new Viacom could be a takeover candidate down the road. “Though we don’t think anything is imminent or that it is for sale, we believe it has assets that would be very attractive for a larger media concern,” he said. The analyst’s other top pick is News Corp. (nyse: NWS - news - people ) with a rating of “buy” and $21 price target. His least favorite is Pixar Animation Studios (nasdaq: PIXR - news - people ), rated “neutral” with a target price of $44.

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