Updated with closing share price: new arrow Basic Global ended Wednesday’s session 18% lower following yesterday’s quarterly earnings and expectations and a hypothetical investor’s day focused on live broadcasts. Wall Street has begun to worry about the high cost of DTC content across the media industry and its impact on earnings.
Previous Viacom CBS It saw some credit rating downgrades but also had some supporters, especially with the stock dropping below $30 and approaching a 52-week low. Rest may be on the horizon – it was flat until it felt higher in post-market trading. The company’s name has now been officially changed and the Nasdaq stock symbol will change to PARA starting tomorrow,
former: ViacomCBS shares tumbled more than 20% in early trading as Wall Street digests the company’s flow strategy, outlook, and financial statements released after the market closed on Tuesday, and it clearly has some issues.
the company, who changes his name to Paramount, She has her supporters. Guggenheim reiterated the “buy” rating but lowered the 12-month price target to $40 from the previous $53 based on the aggregate parts rating that separates the broadcast and traditional media business. Bank of America downgraded its risk-neutral rating to “Neutral” (with a price target of $39). The stock is trading at around $30, approaching a 52-week low after expecting subscriber and revenue growth, but also sharp content spending and operating losses in the growing DTC business over the next few years.
President Shari Redstone, CEO Bob Bakish and the company’s key executives Preview a large selection of new content (from the beginning sonic the hedgehog Original live action series to Teen Wolf of MTV Entertainment Studios and MGM’s Orion Television) and took questions from Wall Street on a virtual investor day nearly a year after Paramount+ launched in March 2021. The company, like its competitors, is a major hub for broadcasting.
“Despite the big announcement that ViacomCBS changed its name… We had a similar question left as we had last year: Will the company be able to increase EBITDA again to match previous levels? In short, unfortunately, we still haven’t We learn anything that helps us believe the answer will be yes, at least for the foreseeable future,” Moffett Nathanson said. (Ebitda is EBITDA; and FCF is free cash flow.)
The company said it understands how Paramount+’s breadth of reach — sports, kids, general entertainment, and news — helps set it apart from its peers (a point Backsh emphasized yesterday). But, “We have a hard time looking at [streaming] on a standalone basis” and “expect continued pressure on linear network economics to limit the company’s overall growth even before accounting for DTC losses projected to peak in 2023.”
DTC Losses Should Expand From $1 billion last year to about $1.5 billion in 2022 and sharpening in 2023 before starting to improve in 2024, as content expenditures jumped from $2 billion last year to $6 billion that year. The company expects an influx of 100 million subscribers in 2024, well ahead of initial expectations.
A note from Quinn – new name, same questions – showing how estimated DTC investments will continue to eat up profits. “Analyst Day’s future direction holds promise for significant revenue stream growth but also continued losses for DTC through at least 2024.” Loop Capital report “Impressive streaming offer, impressive content, but no view of profitability.”
The name change, which makes perfect sense, is effective today and the company will start trading tomorrow under the new stock symbol PARA. Bakish on CNBC This Morning outlined the three main reasons behind this: Paramount Store has more name recognition than Viacom CBS; Creates a unified “comprehensive brand” as opposed to referring to two companies; And – “When you post money for your brand name, you really want to turn it into your flagship product” at Paramount+. “
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