Telsey Advisory Group media analyst Tom Eagan sees a buying opportunity in Viacom’s 21% stock price decline Tuesday, adding that investors have vastly overestimated the company's demise.
Viacom stock was hammered, falling 21% ($8.99 per share) to $32.86 each Tuesday after reporting weak results and executive chairman and CEO Philippe Dauman lashed out at critics. The stock continues to dip Wednesday, trading at $32.45, down 1.3% (44 cents) in the afternoon.
In a note to clients, Eagan wrote that the falloff in Viacom’s stock price represented either multiple compression from 5.9 times cash flow to 5.1 times or an assumption that cash flow would be reduced by about $600 million in fiscal 2016.
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