Wells Fargo Says ViacomCBS Cred Damaged ‘Irreparably’
Investing.com
Published Feb 21, 2020 03:38PM ET
By Kim Khan
Investing.com – ViacomCBS (NASDAQ:VIAC) fell for the second session in a row as Wall Street postulated that its disappointing quarterly numbers weren’t a blip.
Shares dropped 3.6% Friday.
The broadcast and media company reported a net loss and missed earnings expectations by a wide margin yesterday, sending shares down sharply.
Guidance was also an unpleasant surprise. The company said it predicts earnings of $5.15 to $5.50 per share, well shy of the S&P Capital IQ consensus of $5.97 per share.
Wells Fargo (NYSE:WFC) resumed coverage of the stock today and gave it an underweight rating and a price target of $25, about $3 from where it stands now.
The weak guidance and big fourth-quarter miss means the credibility of the company’s management is “irreparably damaged for the time being,” Wells Fargo (NYSE:WFC) analyst Steven Cahall wrote in a note.
ViacomCBS CEO Bob Bakish admitted yesterday the company faced “a significant set of merger-related items that were a headwind for expenses and cash flow” and was in a transitional period.
The company is looking to focus on streaming through this year.
It is planning on launching a new service combining free and paid services of CBS, programming from brands including MTV, Nickelodeon, Comedy Central and BET as well as films from the Paramount movies studio, Reuters reported last week.
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