ViacomCBS down 20% after Q4 report: ‘this is not a broken story’

Shares of ViacomCBS Inc (NASDAQ: VIAC) are down 20% after its Q4 earnings came in significantly below Street estimates. The mass media company also renamed itself “Paramount Global” and updated its streaming strategy on Tuesday.

Lebenthal’s take on the financial and strategy update

Despite the sharp sell-off, Cerity Partners’ Jim Lebenthal says he would cling to this name because subscriber growth continues to look pleasant, and that’s what matters the most to him. On CNBC’s “Halftime Report”, he said:

The financial and strategy update also had BofA Securities’ Jessica Reif Ehrlich downgrade the stock to ‘neutral’. She also slashed her price target on VIAC to $39 from $53.

Lebenthal compares Paramount Global to Netflix

According to Lebenthal, Paramount is growing at a faster pace compared to Netflix, and its content is also comparable to the latter’s.

The multinational entertainment conglomerate expects to double its subs count over the next two years. Lebenthal agreed that Paramount will have to increase its spend by three-fold to accomplish that goal but said:

Lebenthal treated the sell-off on Wednesday as a buying opportunity and added to his position in VIAC. The stock now trades at a PE multiple of 5.65.