Loop Capital Says Viacom's On 'Simply The Worst Cold Streak Ever' Following 'Ben-Hur' Bomb

Viacom, Inc. VIA VIAB is in one heck of a slump. Early indications are that its most recent hope, “Ben-Hur,” will not change Viacom’s luck.

In a new note, Loop Capital Markets analyst David Miller cut earnings estimates for Viacom and discussed the company’s box office losing streak.

According to Miller, the “Ben-Hur” flop could have been a lot worse if MGM hasn’t picked up much of the production cost. However, he estimates Viacom still shouldered roughly $65 million in production and advertising costs for the movie.

In the wake of yet another flop, Loop has slashed FQ4 EPS estimates for Viacom from above-consensus $1.06 to below-consensus $0.85. The firm also cut revenue estimates from $3.39 billion to $3.35 billion.

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Viacom shares are now down 8.8 percent in the past month, making some of the stock’s valuation metrics seem appealing on the surface. Miller notes that the stock now trades at just 7.8x Loop’s F2017 EBITDA estimates and 8.9x its F2017 earnings estimates.

“While those multiples are well below peer-group averages, and well beneath the S&P 00, it’s hard for us to judge VIAB to be anything other than a value trap,” Miller concluded.

Loop maintains a Hold rating and a $46 price target for Viacom.

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