ViacomCBS Is a Rare Value
It's poised to capitalize on streaming trends and is trading well below what we think it's worth.
In a sector where undervalued opportunities are few and far between, ViacomCBS (VIAC) stands out, trading 30% below our $61 fair value estimate. We believe the company is poised to capitalize on the trend toward increased consumer adoption of streaming services with its relaunch of Paramount+ in March and the success of its other streaming platforms like Pluto. The flagship service offers not only a strong on-demand library from the company’s deep library but also access to CBS and its wealth of sports rights, including the NFL and March Madness, which helped to drive streaming growth over the first four months of 2021. With the recent renewal of Sunday afternoon NFL rights, ViacomCBS now controls two of its most important sports rights into the next decade.
Like larger peers Netflix (NFLX) and Disney+ (DIS), Paramount+ and Pluto should both benefit from international expansion. While the rebranded flagship Paramount+ service launched in 23 international markets in March, including 18 in Latin America, it has yet to launch in most of Europe, the largest non-U.S. market for Netflix, or India, the biggest international market for Disney+. Given the opportunity internationally and the relatively low guidance of 65 million-75 million subscribers by 2024, we think it’s likely that Viacom management will raise its outlook in the next two years, similar to the increase that Disney management made in December 2020.
Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.