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Evercore Bullish On ViacomCBS Thanks To Strong Content Pipeline

Dave Royse

ViacomCBS Inc. (NASDAQ: VIAC) could be a "content powerhouse in an era of peak content," Evercore ISI said in resuming coverage of the newly recombined media company with a bullish take.

The Analyst

Evercore ISI's Vijay Jayant resumed coverage of ViacomCBS, in their now-combined form, with an Outperform rating and $51 target price.

The Thesis

The company may be able to pull off a two-pronged approach to new media — feeding the third party content market, while building toward its own platforms, Jayant said.

"We subscribe to the idea that the company will be able to have its cake (continue monetizing a robust content library) and eat it too (invest in new productions while building out direct-to-consumer ... digital platforms)," Jayant wrote in a note.

The companies, which re-merged last week after more than a decade as separate companies, also have integration-related tailwinds, a favorable mix of revenue between advertising and subscription dollars, a strong balance sheet, and a management team with a strong record of capital returns, Jayant wrote.

Price Action

ViacomCBS shares, which began trading last Thursday, traded around $39.86 at time of publication.

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