Deutsche Bank analysts named media and entertainment giant ViacomCBS as a top stock pick for 2022, arguing that it trades at a much lower valuation than its rivals and predicting that the company will A huge content library could turn out to be the next big streaming giant.
Deutsche Bank recently upgraded ViacomCBS to a “buy” rating, raising its price target for the stock to $43 per share — meaning it’s up about 23% from Monday’s price of about $35 per share.
The firm points out that ViacomCBS, which is having “more success in streaming” because it now spends billions of dollars a year on content, is still significantly undervalued compared to rivals such as Netflix and Disney.
According to analysts, Viacom’s enterprise value is a fraction of that of other established streaming giants, “yet its annual content budget puts it within the range of this peer group.”
The media conglomerate also has great appeal thanks to its vast portfolio of popular content brands, including CBS-affiliated stations, Comedy Central, Showtime, Paramount Network, and Pluto TV.
Deutsche Bank is optimistic about Paramount+, the company’s streaming service, launched last year, with content like “Yellowstone”—the most popular show on cable TV—and the prequel series “1883” on its platform.
Shares of ViacomCBS fell 1.3% on Monday, despite a recent analyst upgrade; After falling more than 20% last year, the stock is up more than 8% so far in 2022.