Analyst Note| Neil Macker, CFA |
In a sector where undervalued opportunities are few and far between, we think investors should consider narrow-moat ViacomCBS, which trades 30% below our $61 fair value estimate. We believe ViacomCBS is well poised to capitalize on the secular trend toward increased consumer adoption of streaming services with the 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 firm’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 the Sunday afternoon NFL rights, ViacomCBS now controls two of its most important sports rights into the next decade.