By Emily Bary
Loop Capital analyst sees potential for a stock bounce but says he is 'not advocating buying the shares on this dip'
Shares of ViacomCBS Inc. extended their slide Monday, falling another 6% in afternoon trading to continue a volatile stretch.
Viacom's stock (VIAC) is on pace for its fifth-straight trading day of declines Monday and the stock is off more than 56% over that span.
While the stock had enjoyed a meteoric rise in the last year, surging some 700% in the 12-month span leading up to the start of the stock's declining stretch on March 22, some recent reports suggested that the recent sharp plunges in shares of both Viacom and Discovery Inc. (DISCA)could reflect large block trades (). Archegos Capital Management LLC, run by Bill Hwang, dumped shares of both names, IPO Edge first reported ( /), citing unnamed sources.
Viacom announced a week back that it planned to conduct a $3 billion equity offering ().
Several analysts downgraded Viacom shares last week (), but at least two others delivered tepid upgrades ahead of Monday's session.
"The stock was unusually volatile after its equity offering which was followed by distressed selling late last week, and there could be a bounce with reduced selling pressure," wrote Loop Capital Markets analyst Alan Gould, who upgraded the stock to hold from sell and raised his price target to $48 from $43.
"We are not advocating buying the shares on this dip because we continue to believe the default streaming services in most homes will be Netflix, Disney+ and Amazon Prime and [Viacom's] Paramount+ will compete with HBO Max, Apple TV+, Peacock and Starz to be the fourth or fifth service in the home," he continued.
BMO Capital Markets analyst Daniel Salmon raised his rating to market perform from underperform.
"Our unchanged target of $70 implies considerable upside, but we think Market Perform is more appropriate until trading volatility clears," he wrote. "We think it could make sense to get more proactive if the stock remains under pressure and heads below our $35 fundamental downside scenario."
Viacom shares are still up about 250% over the past 12 months as the S&P 500 has risen 56%.
-Emily Bary; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 29, 2021 17:36 ET (21:36 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.