(Bloomberg) -- Viacom Inc. investors are back in good spirits with the stock on pace for its biggest gain since January 2018.
Shares of the company climbed as much as 11 percent after the cable-network owner reaffirmed its outlook on Tuesday for domestic affiliate revenue growth this year. The update sweetens the contract resolution the company reached with AT&T Inc. earlier this week, fighting off a potential blackout that would have dropped cable channels such as Nickelodeon, MTV, Comedy Central and BET.
"It was always in both companies best interest to avoid conflict," says David Miller, an analyst at Imperial Capital, in a note to clients reaffirming his outperform rating and $37 price target. But the new agreement leaves Wells Fargo to assume "that Viacom moved lower on price."
Some investors may see the settlement as clearing way for the union of Viacom and CBS Corp. all over again.
The New York Post, in an article overnight citing unidentified sources, said "CBS and Viacom are gearing up to resume talks -- and settle once and for all who will be the CEO of the combined company." CBS stock rose as much as 5.7 percent to $48.14 per share, and was on pace for its largest advance in more than ten months.
To contact the reporter on this story: Kamaron Leach in New York at kleach6@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Sebastian Silva
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