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Stock to Get This Week: ViaCBS

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Investors decided to resume buying U.S. equities last week, prompted by optimistic mood that additional vaccine rollouts will make the profitability for the companies that were hardest hit by the pandemic grow rapidly.

Last Thursday Biden shared a new COVID vaccination plan: 200 million vaccines had been distributed within his first 100 days as a president. As of Friday, 100 million vaccinations have already been administered since Biden’s Jan. 20 swearing-in.

The reopening economy increases demand for cyclical stocks, e.g., banks and energy companies, we’ve shared a stock which could see some momentum after its recent earnings report, planned to be announced this week, amid company-related developments.

ViacomCBS

ViacomCBS (NASDAQ:VIAC) fell 27% on Friday after announcement that Archegos Capital Management, a family investment office located in New York and which specializes in investing in stocks traded in NY, China, Japan and South Korea, was obliged by its banks to get rid of positions worth more than $20 billion in stocks that comprise a wide range of companies, from Chinese tech behemoths to U.S. media conglomerates.

Viacom shares were also under pressure after Wells Fargo underestimated the stock, along with Discovery Inc. (NASDAQ:DISCA), saying these media companies are crowding into the streaming market, where they experience intense competition from established leaders. 

“We do see gravity pulling the multiples closer to prior norms,” Wells Fargo analyst explained in a note. Viacom shares dropped 27% to $48.23 on Friday, slashing year-to-date gains to 29%.

Some investors do still see value in Viacom stock despite a massive sell-off, though last week’s wild moves could raise levels of volatility as the trading week begins.

 

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