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Viacom (VIA.B ): Maintains 5 STARS (buy)
Analyst: Tuna Amobi

The Wall Street Journal reported that Viacom may be close to divesting its 82% stake in vide-rental company Blockbuster. S&P says while debt-free Blockbuster's cash-flow growth has been strong, it isn't a compelling fit with Viacom's core media and entertainment assets. The third quarter was evidence that Blockbuster's rental model is increasingly threatened by DVD discounters, online rentals, and the rise of direct-to-consumer digital-delivery platforms. While the deal isn't yet certain, the suggested $2.5 billion price may fall short of fair value. S&P's 12-month target price for Viacom remains $50, on a discounted cash-flow analysis.
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