ViacomCBS Shares Tumble 20% Morning After Paramount Rebrand, Streaming Outlook

deadline.com:

Shares of ViacomCBS are down more than 20% in early trading as Wall Street digests the company’s streaming strategy, outlook and financials announced after the market closed Tuesday, and clearly has some issues.The company, which is changing its name to Paramount, has its supporters.

Guggenheim reiterated a ‘buy’ rating but lowered its 12-month price target to $40 from our prior $53 based on a sum of the parts valuation that separates the streaming and traditional media business.

BoFA cut its rating to ‘neutral’ on risk (with a price target of $39). The stock is changing hands at about $30, approaching its $52-week low after forecasting subscriber and revenue growth, but also steep content spending and operating losses at its ramped up DTC business over the next few years.Chair Shari Redstone, CEO Bob Bakish and the company’s key operating execs previewed a raft of new content (from the first Sonic the Hedgehog original live action series to Teen Wolf from MTV Entertainment Studios and MGM’s Orion Television) and took questions from Wall Street in a virtual investor day almost a year after the launch of Paramount+ in March of 2021.

The company like its rivals is making a major pivot to streaming.“Despite the big announcement of ViacomCBS changing its name… we are left with a similar question as we had last year: will the company be able to grow EBITDA and FCF again to match prior levels?