ViacomCBS has had a very rocky week, which started when the company announced after hours on March 22, that they would be diluting existing shareholders by selling $2 billion of its Class B shares and $1 billion of its convertible class A shares. The company dropped 9% the next day. The next day they priced their offerings at $85 and $100, respectively.
This started the tumble that ended up wiping more than half of the company’s market value off in just a week as prime brokers ultimately had to sell the equity that was tied to billions of dollars worth of swaps they underwrote to a single-family office.
ViacomCBS currently has 27 analysts covering the company with a weighted 12-month price target of $57. This is up from the average from last month of $45. Only one analyst has a strong buy, while four analysts have buy ratings. The majority, twelve analysts have hold ratings, while nine analysts have sell ratings and only one analyst has a strong sell rating. The street high comes from Benchmark with a $120 12-month price target.
On Monday, BMO Capital Markets reiterated their $70 price target and upgraded their rating from underperform to market perform. Their analyst, Daniel Salmon says that there has been no fundamental change and writes, “We think it could make sense to get more proactive if the stock remains under pressure and heads below our $35 fundamental downside scenario.”
He adds, “We move back to Market Perform after recent downward price performance. While our unchanged target of $70 implies considerable upside, we think Market Perform is more appropriate at least until trading volatility clears.”
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.