Stock VIAC

Morningstar Equity Analyst Report | Report as of 19 Nov 2021 00:20, UTC | Reporting Currency: USD | Trading Currency: USD
| Exchange: NASDAQ - ALL MARKETS Page 1 of 18
ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

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Last Price Fair Value Estimate Price/FVE Market Cap Economic Moat Moat Trend Uncertainty Capital Allocation ESG Risk Rating Assessment1
34.23 USD 61.00 USD 0.56 22.84 USD Bil Narrow Negative High Standard ;;;;;
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Price vs. Fair Value
Fair Value: 61.00

16 Apr 2021 18:48, UTC
200
Last Close: 34.23
150 Over Valued
Under Valued
100
50
0
2016 2017 2018 2019 2020 YTD
1.08 0.83 0.62 0.55 0.65 0.56 Price/Fair Value
36.39 -6.13 -24.68 -2.22 -8.93 -6.20 Total Return %
Morningstar Rating
Total Return % as of 18 Nov 2021. Last Close as of 18 Nov 2021. Fair Value as of 16 Apr 2021 18:48, UTC.
Contents
Analyst Note (4 Nov 2021) ViacomCBS Reports Passable Q3; Streaming Ad Growth
Business Description
Business Strategy & Outlook (25 Jun 2021) Shows the Opportunity Ahead of Tubi
Bulls Say / Bears Say (4 Nov 2021)
Analyst Note Neil Macker, CFA, Senior Equity Analyst, 4 Nov 2021
Economic Moat (25 Jun 2021)
Fair Value and Profit Drivers (4 Nov 2021)
ViacomCBS posted decent third-quarter results as revenue met and EBITDA came in just ahead of
Risk and Uncertainty (25 Jun 2021) FactSet consensus expectations. Revenue increased 13%, driven by continued streaming growth as all
Capital Allocation (25 Jun 2021) platforms posted strong subscriber adds and monetization. Unlike some of its media peers, affiliate fee
Analyst Notes Archive growth was anemic, particularly on the cable side. Our narrow moat and $61 fair value estimate are
Financials
intact.
Research Methodology for Valuing Companies
Important Disclosure Global streaming subscribers increased by 4.3 million during the quarter to 47.4 million, and Pluto, a free
The conduct of Morningstar’s analysts is governed by Code of Ethics/Code of
Conduct Policy, Personal Security Trading Policy (or an equivalent of), and
platform, ended the quarter at over 54 million monthly active users. The firm announced a new
Investment Research Policy. For information regarding conflicts of interest, please
streaming service, SkyShowtime, a joint venture with Comcast that will feature content from both
visit: http://global.morningstar.com/equitydisclosures.
companies and be offered in 20 Eastern European markets in 2022. The ad-supported tier of
The primary analyst covering this company does not own its stock.
Paramount+ will be offered for free to T-Mobile subscribers. The new ventures and recent results
The ESG Risk Rating Assessment is a representation of Sustainalytics’ ESG Risk
1
Rating. strengthen our view that the long-term guidance of 65-75 million streaming subscribers by 2024 is very
conservative, especially since management expects higher net adds in the fourth quarter. While
Paramount+ is only available in 26 markets, we expect that the number of markets will double in 2022
alone, making the high-end target of another 28 million net adds seem very modest.
Streaming revenue jumped up 62%, with subscription revenue up 79% to $548 million and ad revenue
improving by 79% to $548 million. Pluto doubled its revenue year over year and the June launch of
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Morningstar Equity Analyst Report | Report as of 19 Nov 2021 00:20, UTC | Reporting Currency: USD | Trading Currency: USD | Exchange: NASDAQ - ALL MARKETS Page 2 of 18

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Sector Industry
Paramount+ Essential, a lower priced ad-supported tier, also helped boost advertising growth.
i Communication ServicesEntertainment
Business Description TV Entertainment revenue improved by 24% year over year due to the streaming growth and improved
ViacomCBS is the recombination of CBS and Viacom that content licensing. Despite a strong sports slate, ad revenue fell 2% due to the loss of political ad
has created a media conglomerate operating around the
revenue and the sale of CNET in October 2020. Affiliate revenue, up 4%, was driven by strong reverse
world. CBS' television assets include the CBS television
compensation growth. Adjusted EBITDA for the segment dropped by 45% to $216 million as the firm
network, 28 local TV stations, and 50% of CW, a joint
venture between CBS and Time Warner. The company continues to invest in Paramount+ content.
also owns Showtime and Simon & Schuster. Viacom
owns several leading cable network properties, including Business Strategy & Outlook Neil Macker, CFA, Senior Equity Analyst, 25 Jun 2021
Nickelodeon, MTV, BET, Comedy Central, VH1, CMT, and Formed via the reunion of Viacom and CBS, ViacomCBS derives a sustainable competitive advantage
Paramount. Viacom has also built several online from the CBS broadcast network, a valuable portfolio of cable networks with worldwide carriage,
properties on the strength of these brands. Viacom's
production studios, and a now deeper content library. Given our overarching premise that the value of
Paramount Pictures produces original motion pictures
high-quality content will continue to increase, the television production studios are among the most
and owns a library of 2,500 films, including the Mission:
Impossible and Transformers series. attractive assets of the reunited firm.
The CBS studio has a history of generating hit programs such as NCIS and then creating spin-off series
such as NCIS: New Orleans and NCIS: Los Angeles. These series generate multiple cash flows across
different windows, such as broadcast first run, cable and international syndication, and SVOD. We
expect the company to increase the percentage of content on the broadcast network created in-house
(currently above 70%) to fully capture the multiple cash flows that a hit show can produce.
We believe the CBS broadcast network also provides ViacomCBS with an advantage, as the networks
are the only outlets to reach almost all households in the United States. The ongoing fragmentation of
media impedes advertisers' ability to reach a mass audience. Even with viewers' shift toward cable over
the years, network ratings still outpace cable ratings and provide advertisers with one of the only
remaining methods for reaching a large number of consumers. We believe the combination of highly
rated original programming and exclusive sports rights will allow CBS to continue to increase its
revenue from retransmission fees and reverse compensation while still receiving higher ad rates than a
typical cable network.
We think that top-line growth will be driven by streaming revenue from both Paramount+ and Pluto TV.
The two services build on the firm's strong content creation abilities, deep programming library, and the
secular trend toward greater streaming adoption. As a result, Paramount+ can still carve out a position
in this intensely competitive market despite the large head start of the incumbents.
Bulls Say Neil Macker, CFA, Senior Equity Analyst, 4 Nov 2021
u CBS owns valuable sports rights, including the NFL, the NCAA's March Madness, and college football.
This popular programming gives CBS leverage in negotiations with pay-TV distributors for
retransmission fees and with advertisers interested in the live viewing audience.
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Competitors
ViacomCBS Inc Class B VIAC The Walt Disney Co DIS AMC Networks Inc Class A AMCX Fox Corp Class A FOXA
Fair Value Fair Value Fair Value Fair Value

61.00 170.00 58.00 41.00
Uncertainty : High Uncertainty : High Uncertainty : High Uncertainty : High
Last Close Last Close

155.58 Last Close 39.57
Last Close 44.35
34.23
Economic Moat Narrow Wide Narrow Narrow

Moat Trend Negative Stable Stable Negative
Currency USD USD USD USD
Fair Value 61.00 16 Apr 2021 18:48, UTC 170.00 13 Aug 2021 13:47, UTC 58.00 12 Apr 2021 15:03, UTC 41.00 8 Nov 2021 23:36, UTC
1-Star Price 94.55 263.50 89.90 63.55
5-Star Price 36.60 102.00 34.80 24.60
Assessment Under Valued 17 Nov 2021 Fairly Valued 17 Nov 2021 Under Valued 17 Nov 2021 Fairly Valued 17 Nov 2021
Morningstar Rating QQQQQ18 Nov 2021 22:23, UTC QQQ18 Nov 2021 22:23, UTC QQQQ18 Nov 2021 22:23, UTC QQQ18 Nov 2021 22:23, UTC
Analyst Neil Macker, Senior Equity Analyst Neil Macker, Senior Equity Analyst Neil Macker, Senior Equity Analyst Neil Macker, Senior Equity Analyst
Capital Allocation Standard Standard Standard Standard
Price/Fair Value 0.56 0.92 0.76 0.97
Price/Sales 0.82 4.27 0.66 1.79
Price/Book 1.10 3.23 2.31 2.01
Price/Earning 7.19 141.74 6.23 13.47
Dividend Yield 2.74% 0.52% — 1.17%
Market Cap 22.84 Bil 285.89 Bil 1.93 Bil 22.26 Bil
52-Week Range 32.09—101.97 140.86—203.02 27.87—83.63 27.12—44.80
Investment Style Mid Value Large Growth Small Value Mid Value
u Paramount+ is poised to gain share and drive top-line growth.
u High-quality content is tough to build from scratch, and CBS owns one of the more successful television
production studios.
Bears Say Neil Macker, CFA, Senior Equity Analyst, 4 Nov 2021
u ViacomCBS' business model depends on the continued growth of retransmission, reverse compensation,
and affiliate fees. Increased cord-cutting by consumers and lower ratings could threaten the growth of
these fees.
u If advertisers shift money away from the broadcast networks, profitability at ViacomCBS will also fall
rapidly because of the high operating leverage of the television business model.
u Developing hit programs can be unpredictable, especially as ViacomCBS is trying to develop more
shows internally.
Economic Moat Neil Macker, CFA, Senior Equity Analyst, 25 Jun 2021
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We assign ViacomCBS a narrow moat rating. Our guiding premise in media is that the value of video
content continues to increase even as the distribution markets mutate. Despite changes in distribution,
pay-TV penetration remains at around 70% of U.S. households. Even without a pay-TV subscription,
most cord-cutters still consume video content and many use antennas to capture signals, providing
content creators with an additional avenue to generate revenue from these viewers. While over-the-top
providers like Netflix and Amazon Prime are creating their own content, both services require deep
libraries to gain and retain subscribers. Given the ongoing demand for content, we believe content
creation is not a zero-sum game, as high-quality content will always find an outlet.
ViacomCBS' competitive advantage lies in the CBS broadcast network, a valuable portfolio of cable
networks with worldwide carriage, production studios, and a now deeper content library. The company
owns one of four major national broadcast networks and affiliated TV stations in 16 markets. While
network ratings have declined over the past two decades, the broadcast networks are the only outlet to
reach almost all 120 million households in the U.S. Network ratings still outpace cable ratings and
provide advertisers with one of the only remaining methods for reaching a large number of consumers.
The network also provides an outlet for CBS Studios, which has generated multiple hit programs on an
annual basis. CBS Studios currently produces or coproduces 80% of the prime-time slate on CBS, with
40% fully produced in house. The strong ratings at CBS offer a virtuous cycle in which the creators of
the network's hit shows have an incentive to launch new shows with the network and the ratings
attract other creators to the platform.
CBS also has a strong portfolio of sport rights including NFL, college football, and college basketball.
Live sport is one of the few programming categories to remain largely immune to DVR/time-shifted
viewing and continues to draw males aged 18-49, a key advertising demographic. We believe the
combination of highly rated original programming and exclusive sports rights will allow CBS to continue
to increase its revenue from retransmission fees and reverse compensation.
A new entrant will encounter two major hurdles to launching a new cable channel with widespread
distribution either in the United States or abroad. First, the cost to create new high-quality content is
very high. While some of Viacom's channels may air lower-quality original programming than its peers,
the company spends more than $3 billion per year on content creation. Second, building an audience
even with investing in content has become harder than ever as demonstrated by the struggles of Apple
TV+ and Quibi among a host of other OTT platforms. One of the issues that online services face is the
wide open nature of the Internet and the difficulty in standing out among the vast array of choices, In
contrast, the walled garden of pay-TV provides a safer arena to launch a new platform, and a larger
player like Viacom can use its established, well-known channels to advertise its new ones. While it is
harder to gain carriage for a brand-new network as most distributors have enough channels, Viacom
can rebrand one of its existing channels in order to quickly gain carriage as the firm did with Paramount
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Channel, which formerly operated as Spike Network. As a result, the company owns more than 310
channels across 180 countries, broadcasting in 46 languages with over 4.4 billion cumulative
subscribers.
Viacom operates two channels with extremely strong brands: Nickelodeon and MTV. Nickelodeon
recently regained its position as the top domestic cable channel for young children and now reaches
over 600 million cumulative households worldwide. While MTV does not generate cash flows as strong
as Nickelodeon's, the brand retains a strong appeal internationally, with 987 million cumulative
subscribers worldwide. Additionally, the company owns other solid brands, including VH1, Comedy
Central, and BET.
Fair Value and Profit Drivers Neil Macker, CFA, Senior Equity Analyst, 4 Nov 2021
Our $61 fair value estimate for ViacomCBS implies a price/earnings ratio of 12 times our 2021 earnings
per share estimate and a 10 times enterprise value/adjusted EBITDA multiple.
We forecast average annual top-line growth of 6% through 2025, reflecting the fast growth at the new
Paramount+ service which will drive 8% average annual growth for the CBS network and 5% at the
cable segments, partially offset by the slower 4% growth at the studio networks. The growth of the CBS
segment will be driven in part by retransmission and reverse compensation growth as the national CBS
network commands a greater share of revenue from both local affiliate broadcast stations and pay-
television providers. We now expect greater revenue growth from subscriber additions from
Paramount+ which will benefit from a greater library and increased content investment than CBS All
Access. For the cable networks, we currently project a slight benefit from the merger in terms of driving
additional affiliate fee growth in the near term but expect the overall effect to moderate quickly. We
also believe that advertising revenue for the networks will decline as the result of a lower subscriber
base in an increasingly competitive market. However, the Pluto linear streaming service will generate
strong ad revenue growth as the platform expands internationally and increases its monthly active user
base.
We forecast that EBITDA margin will average around 18% over the next five years. We expect the
higher-margin revenue from retransmission and reverse compensation will be offset by higher content
and sports rights costs at the broadcast and pay TV networks and the DTC platforms. We expect that the
$750 million of synergy benefits from the merger will be offset by increased content spending to support
the DTC platforms.
Risk and Uncertainty Neil Macker, CFA, Senior Equity Analyst, 25 Jun 2021
The new business models proliferating throughout the media sector could diminish ViacomCBS' revenue
growth or profitability. Viewership of its programs could fall below expectations, and advertisers could
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pull back on their spending, both of which could drag on advertising sales growth. As more than 40% of
revenue stems from advertising, ViacomCBS remains vulnerable to another economic slowdown.
Licensing historical content to online players like Netflix and other video-on-demand providers could
have long-term negative implications for ViacomCBS' audience ratings.
Chairman Emeritus Sumner Redstone and Chair Shari Redstone control ViacomCBS through ownership
of Class A shares--representing nearly 80% of the outstanding voting shares--held by their family-owned
firm, National Amusements. The more liquid Class B shares don't have voting rights. Because of
Redstone's age (95) and his meaningful stake in the company, the National Amusements transition plan
remains a topic of interest for investors. The current transition plan calls for a board of seven trustees to
make decisions for the family trust that controls National Amusements and thus ViacomCBS. The board
will make any decision in the best interests of the beneficiaries of the family trust. This could include
selling ViacomCBS, re-splitting up the two firms, or continuing the status quo. Chair Shari Redstone now
effectively controls the board of trustees, leaving the fate of both companies in her hands for now.
Capital Allocation Neil Macker, CFA, Senior Equity Analyst, 25 Jun 2021
We assign ViacomCBS a Standard capital allocation rating. Our rating is driven primarily by the
likelihood that ViacomCBS adds value through investments but also takes into account the shape of its
balance sheet and its shareholder distributions.
The recombined firm ended the first quarter of 2021 with $17.8 billion in long-term debt and $5.5 billion
in cash, a decent position. Both of the predecessor firms were operating with leverage just under 3
times adjusted EBITDA, a level that we expect that ViacomCBS will stay under over the long term.
However, the firm will likely remain above these levels in the short term due to the impact of COVID-19
on EBITDA.
While CBS had been very aggressive in returning capital to shareholders via stock repurchases, we
expect that the combined firm will invest more aggressively in creating content and in revitalizing the
cable networks and Paramount studio along with paying down the debt load. Additional capital will be
used to fund the dividend that was maintained at CBS but had been cut in half at Viacom in 2016. The
firm was able to raise $2.6 billion via an equity offering in March 2021 as management took advantage
of a skyrocketing stock price.
ViacomCBS operates in a highly competitive landscape in which many of its peers are similarly
transitioning to a direct to consumer focus or adding a DTC offering like Disney+, Peacock
(NBCUniversal), or Discovery+ (Discovery). We expect the firm to continue to invest in both original and
third-party programming as Paramount+ expands across the globe. We think this use of capital will
likely generate the highest returns for ViacomCBS over the long run.
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CBS succeeded in retaining its critical Sunday afternoon NFL rights until 2033 but will lose the SEC
college football game of week to ESPN in 2023. CBS has UEFA Champions and Europa League rights
along with other soccer rights to bulk its streaming sports offerings. We expect that CBS will bid hard
for more soccer rights including the English Premier League rights starting in 2022 but may be
outgunned by ESPN, which offers not only a number of cable networks but also has ESPN+, a streaming
sport platform. The need to secure more rights for both CBS and the DTC platform along with increased
competition for rights may cause ViacomCBS to overbid for sports rights and thus impact margins over
the first few years of any deal.
On the investment front, we remain cautious, as the management team has a limited track record.
However, the current management appears to have found a gem in Pluto TV. But we are worried the
media M&A space has been hot over the past few years, driving up prices and increasing the chance
that ViacomCBS and its peers will overpay in order to close deals.
Analyst Notes Archive
ViacomCBS Posts In-Line Q2, but Streaming Momentum Is Clearly Building Neil Macker, CFA, Senior
Equity Analyst, 5 Aug 2021
ViacomCBS reported in-line second-quarter revenue, and EBITDA met FactSet consensus expectations.
Top-line growth of 8% was driven by the rebound in advertising, the return of live sports, and continued
streaming growth. The firm’s streaming platforms posted a strong quarter both in terms of new
subscribers and monetization. ViacomCBS also announced a distribution deal with Sky to launch
Paramount+ in 2022 in its Western European markets. We are maintaining our narrow moat rating and
$61 fair value estimate.
Global streaming subscribers increased by 6.5 million during the quarter to 42.4 million, and Pluto, a free
platform, added 2.8 million monthly active users to end the quarter at 52.3 million. The recent results
and the Sky agreement reinforce our view that the long-term guidance of 65-75 million streaming
subscribers by 2024 is very conservative. While Paramount+ is only available in 25 markets, we expect
much wider distribution by 2024, making the high-end target of another 33 million net adds seem very
modest.
Streaming revenue exploded, up 98%, as ad revenue bounced back at Pluto and the smaller streaming
platforms like Showtime and BET+ continued to grow their subscriber bases. Streaming subscription
revenue improved to $481 million, up 82% year over year and subscription average revenue per user
increased 4% sequentially. On the ad side, streaming revenue jumped by 102% to $502 million as Pluto
continues to improve engagement with domestic time watched per MAU up 45% in the quarter. The
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June launch of Paramount+ Essential, a lower priced ad-supported tier, should help boost advertising
growth.
ViacomCBS Poised to Capitalize with Paramount+; International Streaming Expansion Key to Growth
Neil Macker, CFA, Senior Equity Analyst, 3 Jun 2021
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.
Like its larger peers, Netflix and Disney+, we expect that Paramount+ and Pluto will both benefit from
international expansion. While the rebranded flagship service launched in 23 international markets in
March including 18 in Latin America, the service has yet to launch in most of Europe, the largest non-
U.S. market for Netflix, or India, the biggest international market for Disney+. Given the opportunity
internationally and the relatively low guidance of 65-75 million subscribers by 2024, we think it’s likely
that management raises the guidance in the next two years similar to the increase that Disney
management made in December 2020.
In order to support the streaming growth, we project that ViacomCBS will continue to invest in content
creation for the linear networks, theatrical slate, and the streaming platforms. Additionally, we expect
that the firm will likely exceed its minimal target of $5 billion in streaming content spending as it ramps
local language content to better compete with Disney+ and Netflix around the world. This spending will
not help to drive subscription revenue but also ad revenue for both the lower-priced ad-supported tier
and Pluto.
ViacomCBS Posts Strong Q1 Due to Super Bowl; Streaming Set to Benefit From Strong Sports Rights
Neil Macker, CFA, Senior Equity Analyst, 6 May 2021
ViacomCBS reported a better-than-expected start to 2021 as first-quarter revenue and EBITDA beat
Visible Alpha consensus expectations. Top-line growth of 14% was driven by the Super Bowl and NCAA
basketball tournament. Sporting events also helped drive uptake and ad revenue growth at
Paramount+, which is positioned to benefit from the large catalog of sports rights at CBS. We are
maintaining our narrow moat rating and $61 fair value estimate.
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In the quarter, the streaming services benefited from lockdown restrictions and the rebranding/relaunch
of Paramount+. Global SVOD subscribers increased by 6.0 million to 35.9 million, and Pluto, a free
platform, added 6.4 million monthly active users to end the quarter at 49.5 million. The recent results
reinforce our view that the long-term guidance of 65 million-75 million SVOD subscribers by 2024 is very
conservative. While Paramount+ only launched in the Americas in March, we expect much wider
distribution by 2024, making even the high-end target of another 40 million net adds seem modest.
Revenue improved by 14% to $7.4 billion as ad revenue was buoyed by the tentpole sporting events and
increased streaming usage. TV Entertainment (CBS network, Paramount+, and other ventures) revenue
grew 14% year over year as the increases in affiliate fee revenue (+11%), streaming revenue (+58%),
and advertising (+40%) overwhelmed the drop in content licensing (down 17%) due to the continued
COVID-19-related production delays in delivering content to third parties. While the Super Bowl will not
be on CBS again until 2024, the ad revenue generated from the event and March Madness
demonstrates the enduring power and draw of mass audience events to advertisers on traditional and
digital platforms. This ability to place events on both platforms is, we believe, one of the main reasons
that CBS and its broadcasting peers have been able to largely retain and renew sports rights like the
NFL rather than losing them to pure streaming services.
ViacomCBS Shares Tumble Due to Equity Raise; Proceeds to Be Invested in Paramount+ Neil
Macker, CFA, Senior Equity Analyst, 26 Mar 2021
ViacomCBS capped a tumultuous week with a 25%-plus share price decline on March 26, resulting in a
five-day drop of more than 50%. The decline was sparked by the March 22 announcement of an equity
raise in the form of Class B common shares and mandatory convertible preferred shares. The offering
priced on March 24 for total proceeds of roughly $2.6 billion to the firm in exchange for a total number
of shares equal to about 5% of those currently outstanding. The instant arrival of 20 million new shares
appears to have sparked an investor sell-off as the likelihood of a short squeeze has decreased. We
applaud management’s foresight to raise capital by selling at what we viewed as inflated prices. We are
maintaining our narrow moat rating and $57 fair value estimate.
The new Class B shares priced at $85 per share. The convertible shares will mandatorily convert on April
1, 2024, for 1.0013 to 1.1765 Class B shares, implying a price of $85 to $100. With a 5.75% annual
dividend rate, the lowest implied issue price of the convertible after accounting for the dividends is
$67.75, still well above where the stock closed on March 26 and our fair value estimate.
ViacomCBS doesn’t necessarily need the cash, as it should generate more cash flow in 2021 than it pays
out in dividends. Management can use the proceeds to accelerate investment in its streaming efforts
without worrying about near-term cash flow or debt maturities. We think this is of one the best uses for
the capital as Paramount+ is the most likely candidate to drive top-line growth over the next five years
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for the firm. While the space is increasingly competitive, the combined libraries of CBS and Viacom
contain some very popular franchises like SpongeBob, NCIS, Star Trek, and Mission: Impossible that
could help the new service gain and retain subscribers. CBS recently renewed its NFL rights deal at a
higher annual rate, which could have meant less cash for the streaming service before the equity raise.
New NFL TV Rights Deal Favors Incumbent Media Players; Streamers Other Than Amazon Sidelined
Neil Macker, CFA, Senior Equity Analyst, 19 Mar 2021
The NFL announced its much-anticipated new TV rights deals on March 18 as the sport tries to
capitalize on its dominant position in U.S. linear television viewing. While many observers expected a
number of new players to bid, the new contracts that cover the 2023 to 2033 seasons for a total outlay
of $110 billion largely involved the same networks and platforms that have broadcast the league’s
games. The traditional media players appear to be investing heavily in these rights to strengthen the
traditional pay TV bundle as they struggle to hold on to subscribers.
The only new media/tech firm to win any of the rights was Amazon, which only bought the exclusive
out-market rights to 15 Thursday night games that it had been already streaming for the last few years.
NBC, CBS, Fox, and ESPN generally held on to the same rights they previously had with the exception of
ESPN/ABC, which gained two Super Bowls, six more regular season games, and an additional playoff
game. While the average price over the length of the contract increased from $5.9 billion to $11 billion,
we think the increase from the end of the previous contract in 2022 to the start of the new one in 2023
will be much lower as the contracts generally have annual escalators.
We think that the NFL and its traditional media partners are also pushing back against the direct-to-
consumer cannibalization of the linear pay-TV bundle even with the Amazon deal. The linear networks
will continue to have the best games on Sunday and Monday with the right to flex games later in the
season on the night games. Additionally, the local market broadcasts for Thursday night games will
likely be on one of the local affiliates of the four major broadcasters. Given the lower national interest in
these games traditionally, a significant portion of the audience will likely be in the local markets. We are
maintaining our fair value estimates of $154, $54, $37, and $57 for Disney, Comcast, Fox, and
ViacomCBS, respectively.
ViacomCBS Reports Inline Q4; Investor Day Highlights the Potential of Paramount+ Neil Macker,
CFA, Senior Equity Analyst, 25 Feb 2021
ViacomCBS posted an inline end to 2020 as fourth quarter revenue and EBITDA met FactSet consensus
expectations. The earnings were overshadowed by the Paramount+ investor day which featured some
actual news along with the now de rigueur sizzle reel and a few unfortunate technical difficulties. The
service appears to be CBS All Access on serious content steroids. We think a combination of the live
CBS feed, a news channel, live sports, a massive catalog, and a number of original series at either $5 or
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$10 per month will be appealing to many U.S. consumers, but the attractiveness to international
viewers may depend on the strength of local language content. We are maintaining our narrow moat for
ViacomCBS and expect to modestly raise our $57 fair value when we update our model.
The pivot by ViacomCBS to a streaming platform from a content licensor to other platforms appears to
almost complete, at least in the U.S. Paramount+ will not only be the home to over 30,000 episodes of
TV and 2,500 movies, but also home to 36 original scripted and nine unscripted series in 2021 alone.
Similar to Universal, certain movies from Paramount will be available on the platform within 45 days of
its theatrical release and all of the studio’s and MGM’s movies will be on Paramount+ during the pay
one window. While Paramount+ will launch in a very competitive landscape, ViacomCBS appears to be
putting it in a position to succeed.
In the quarter, the streaming services benefited once again from lockdown restrictions. Global SVOD
subscribers increased by 2 million to 29.9 million and Pluto added 7.3 million monthly active users to
end the year at 43.1 million. Given the wealth of content and resources allocated to Paramount+, we
view the long-term guidance of 65-75 million SVOD subscribers by 2024 as very conservative. While
Paramount+ will only launch in the Americas on March 4, we expect much wider distribution by 2024,
making even the high-end target of 45 million net adds seem paltry. K
ß
Competitors Price vs. Fair Value
The Walt Disney Co DIS
Fair Value: 170.00

13 Aug 2021 13:47, UTC
200
Last Close: 155.58
150 Over Valued
Under Valued
100
50
0
2016 2017 2018 2019 2020 YTD
0.78 0.83 0.84 1.03 1.29 0.92 Price/Fair Value
0.60 4.71 3.59 33.51 25.27 -14.13 Total Return %
Morningstar Rating
Total Return % as of 18 Nov 2021. Last Close as of 18 Nov 2021. Fair Value as of 13 Aug 2021 13:47, UTC.
AMC Networks Inc Class A AMCX
Fair Value: 58.00

12 Apr 2021 15:03, UTC
200
Last Close: 44.35
150 Over Valued
Under Valued
100
50
0
2016 2017 2018 2019 2020 YTD
0.68 0.76 0.80 0.61 0.78 0.76 Price/Fair Value
-29.91 3.32 1.48 -28.02 -9.44 23.99 Total Return %
Morningstar Rating
Total Return % as of 18 Nov 2021. Last Close as of 18 Nov 2021. Fair Value as of 12 Apr 2021 15:03, UTC.
ß
Fox Corp Class A FOXA
Fair Value: 41.00

8 Nov 2021 23:36, UTC
40
Last Close: 39.57
30 Over Valued
Under Valued
20
10
0
2016 2017 2018 2019 2020 YTD
— — — 0.88 0.79 0.97 Price/Fair Value
— — — — -20.21 37.50 Total Return %
Morningstar Rating
Total Return % as of 18 Nov 2021. Last Close as of 18 Nov 2021. Fair Value as of 8 Nov 2021 23:36, UTC.
ß

TM TM
17 Nov 2021 3 Nov 2021 05:00, UTC
18 Nov 2021 16 Apr 2021 18:48, UTC
Morningstar Historical Summary

Financials as of 30 Sep 2021
Fiscal Year, ends 31 Dec 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD TTM
Revenue (USD Bil) 14 13 14 13 13 13 27 26 27 25 21 27
Revenue Growth % 1.3 -6.0 9.2 -10.6 1.2 3.9 101 -0.4 2.2 -6.3 11.8 5.9
EBITDA (USD Mil) 3,109 3,064 3,330 2,471 2,891 2,866 5,651 5,441 4,623 4,608 3,823 5,173
EBITDA Margin % 22.8 23.9 23.8 19.7 22.8 21.8 21.3 20.6 17.1 18.2 18.6 18.8
Operating Income (USD Mil) 2,662 2,808 3,045 2,609 2,703 2,729 5,101 5,486 4,816 4,688 3,566 4,809
Operating Margin % 19.5 21.9 21.7 20.8 21.3 20.7 19.2 20.8 17.8 18.5 17.3 17.5
Net Income (USD Mil) 1,305 1,574 1,879 2,959 1,413 1,261 2,321 3,455 3,308 2,422 2,485 3,295
Net Margin % 9.6 12.3 13.4 23.6 11.2 9.6 8.8 13.1 12.3 9.6 12.1 12.0
Diluted Shares Outstanding (Mil) 681 659 624 561 489 448 647 621 617 618 644 638
Diluted Earnings Per Share (USD) 1.92 2.39 3.01 5.27 2.89 2.81 3.59 5.57 5.36 3.92 3.81 5.12
Dividends Per Share (USD) 0.35 0.44 0.48 0.54 0.60 0.66 0.72 0.72 0.78 0.96 0.72 0.96
Valuation as of 29 Oct 2021

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Recent Qtr TTM
Price/Sales 1.3 1.8 2.7 2.2 1.7 2.0 1.8 1.2 1.0 0.9 0.9 0.9
Price/Earnings 15.4 15.3 22.2 21.6 15.3 17.5 15.8 11.6 5.4 17.3 7.7 7.1
Price/Cash Flow 10.2 13.8 24.4 38.5 14.7 14.1 17.9 15.6 27.0 10.9 8.5 7.8
Dividend Yield % 1.29 1.16 0.75 0.98 1.27 1.04 1.22 1.65 1.86 2.58 2.43 2.65
Price/Book 1.8 2.3 3.9 3.7 3.7 4.9 7.5 6.5 5.1 1.6 1.3 1.2
EV/EBITDA 7.3 9.5 13.2 14.1 10.6 12.6 5.7 4.8 7.8 9.0 0.0 0.0
Operating Performance / Profitability as of 30 Sep 2021
Fiscal Year, ends 31 Dec 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD TTM
ROA % 5.0 6.0 7.1 11.8 5.9 5.3 10.3 10.6 7.0 4.7 — 6.1
ROE % 13.2 15.7 18.6 34.9 22.6 27.3 81.9 55.6 28.0 17.0 — 18.8
ROIC % 10.0 11.5 13.1 20.9 11.9 11.3 24.8 20.5 12.5 9.2 — 10.9
Asset Turnover 0.5 0.5 0.5 0.5 0.5 0.5 1.2 0.8 0.6 0.5 — 0.5
Financial Leverage
Fiscal Year, ends 31 Dec 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Recent Qtr TTM
Debt/Capital % 37.6 36.6 37.3 48.2 59.7 70.7 82.7 63.4 59.9 58.1 48.3 —
Equity/Assets % 37.8 38.6 37.8 29.1 23.4 15.2 9.5 23.5 26.6 29.2 36.8 —
Total Debt/EBITDA 1.9 1.9 1.9 2.9 2.9 3.3 1.8 3.5 4.4 4.6 5.0 —
EBITDA/Interest Expense 7.1 7.6 8.9 6.8 7.4 7.0 5.2 5.3 4.8 4.5 5.1 5.1
Morningstar Analyst Historical/Forecast Summary as of 04 Nov 2021

Financials Estimates Forward Valuation Estimates
2019 2020 2021 2022 2023
Fiscal Year, ends 31 Dec 2019 2020 2021 2022 2023
Price/Sales 1.0 0.9 0.8 0.7 0.7
Revenue (USD Bil) 27 25 28 30 31 Price/Earnings 8.2 10.0 6.9 7.4 7.5
Revenue Growth % -0.9 -6.3 10.6 6.6 3.9 Price/Cash Flow 29.6 12.2 9.9 11.6 10.0
EBITDA (USD Mil) 5,404 5,384 5,350 5,226 5,171 Dividend Yield % 2.29 2.60 2.98 3.13 3.27
EBITDA Margin % 20.0 21.3 19.1 17.5 16.7 Price/Book — — — — —
EV/EBITDA 6.7 7.7 6.9 7.0 7.1
Operating Income (USD Mil) 4,366 4,543 4,966 4,838 4,791
Operating Margin % 16.2 18.0 17.8 16.2 15.5
Net Income (USD Mil) 3,148 2,305 3,175 2,995 2,969
Net Margin % 11.7 9.1 11.4 10.1 9.6
Diluted Shares Outstanding (Mil) 617 618 636 651 651
Diluted Earnings Per Share(USD) 5.10 3.73 4.99 4.60 4.56
Dividends Per Share(USD) 0.96 0.97 1.02 1.07 1.12
ß
Overview timate of a firm’s cost of capital, or weighted average In this stage, which can last five to 10 years, analysts
At the heart of our valuation system is a detailed projec- cost of capital (or WACC). Without a moat, profits are make full financial statement forecasts, including items
tion of a company’s future cash flows, resulting from our more susceptible to competition. We have identified five such as revenue, profit margins, tax rates, changes in
analysts’ research. Analysts create custom industry and sources of economic moats: intangible assets, switching workingcapital accounts, and capital spending. Based on
company assumptions to feed income statement, balance costs, network effect, cost advantage, and efficient scale. these projections, we calculate earnings before interest,
sheet, and capital investment assumptions into our glob- after taxes (EBI) and the net new investment (NNI) to de-
ally standardized, proprietary discounted cash flow, or Companies with a narrow moat are those we believe are rive our annual free cash flow forecast.
DCF, modeling templates. We use scenario analysis, inde- more likely than not to achieve normalized excess returns
for at least the next 10 years. Wide-moat companies are Stage II: Fade
pth competitive advantage analysis, and a variety of other
those in which we have very high confidence that excess The second stage of our model is the period it will take
analytical tools to augment this process. Moreover, we
returns will remain for 10 years, with excess returns more the company’s return on new invested capital—the re-
think analyzing valuation through discounted cash flows
likely than not to remain for at least 20 years. The longer turn on capital of the next dollar invested (“RONIC”)—to
presents a better lens for viewing cyclical companies,
a firm generates economic profits, the higher its intrinsic decline (or rise) to its cost of capital. During the Stage II
high-growth firms, businesses with finite lives (e.g.,
value. We believe low-quality, no-moat companies will period, we use a formula to approximate cash flows in
mines), or companies expected to generate negative
see their normalized returns gravitate toward the firm’s lieu of explicitly modeling the income statement, balance
earnings over the next few years. That said, we don’t dis-
cost of capital more quickly than companies with moats. sheet, and cash flow statement as we do in Stage I. The
miss multiples altogether but rather use them as support-
length of the second stage depends on the strength of
ing cross-checks for our DCF-based fair value estimates.
When considering a company's moat, we also assess the company’s economic moat. We forecast this period to
We also acknowledge that DCF models offer their own
whether there is a substantial threat of value destruction, last anywhere from one year (for companies with no eco-
challenges (including a potential proliferation of estim-
stemming from risks related to ESG, industry disruption, nomic moat) to 10–15 years or more (for wide-moat com-
ated inputs and the possibility that the method may miss
financial health, or other idiosyncratic issues. In this con- panies). During this period, cash flows are forecast using
shortterm market-price movements), but we believe these
text, a risk is considered potentially value destructive if its four assumptions: an average growth rate for EBI over the
negatives are mitigated by deep analysis and our
occurrence would eliminate a firm’s economic profit on a period, a normalized investment rate, average return on
longterm approach.
cumulative or midcycle basis. If we deem the probability new invested capital (RONIC), and the number of years
of occurrence sufficiently high, we would not characterize until perpetuity, when excess returns cease. The invest-
Morningstar’s equity research group (”we,” “our”) be-
the company as possessing an economic moat. ment rate and return on new invested capital decline un-
lieves that a company’s intrinsic worth results from the
til a perpetuity value is calculated. In the case of firms
future cash flows it can generate. The Morningstar Rating
To assess the sustainability of excess profits, analysts per- that do not earn their cost of capital, we assume marginal
for stocks identifies stocks trading at a discount or premi-
form ongoing assessments of the moat trend. A firm’s ROICs rise to the firm’s cost of capital (usually attribut-
um to their intrinsic worth—or fair value estimate, in
moat trend is positive in cases where we think its sources able to less reinvestment), and we may truncate the
Morningstar terminology. Five-star stocks sell for the
of competitive advantage are growing stronger; stable second stage.
biggest risk adjusted discount to their fair values, where-
as 1-star stocks trade at premiums to their intrinsic worth. where we don’t anticipate changes to competitive ad-
vantages over the next several years; or negative when Stage III: Perpetuity
Four key components drive the Morningstar rating: (1) our we see signs of deterioration. Once a company’s marginal ROIC hits its cost of capital,
assessment of the firm’s economic moat, (2) our estimate we calculate a continuing value, using a standard per-
of the stock’s fair value, (3) our uncertainty around that 2. Estimated Fair Value petuity formula. At perpetuity, we assume that any
fair value estimate and (4) the current market price. This Combining our analysts’ financial forecasts with the growth or decline or investment in the business neither
process ultimately culminates in our singlepoint star rat- firm’s economic moat helps us assess how long returns creates nor destroys value and that any new investment
ing. on invested capital are likely to exceed the firm’s cost of provides a return in line with estimated WACC.
capital. Returns of firms with a wide economic moat rat-
ing are assumed to fade to the perpetuity period over a Because a dollar earned today is worth more than a dollar
1. Economic Moat
longer period of time than the returns of narrow-moat earned tomorrow, we discount our projections of cash
The concept of an economic moat plays a vital role not
firms, and both will fade slower than no-moat firms, in- flows in stages I, II, and III to arrive at a total present
only in our qualitative assessment of a firm’s long-term
creasing our estimate of their intrinsic value. value of expected future cash flows. Because we are
investment potential, but also in the actual calculation of
modeling free cash flow to the firm—representing cash
our fair value estimates. An economic moat is a structural
Our model is divided into three distinct stages: available to provide a return to all capital providers—we
feature that allows a firm to sustain excess profits over a
discount future cash flows using the WACC, which is a
long period of time. We define economic profits as re-
weighted average of the costs of equity, debt, and pre-
turns on invested capital (or ROIC) over and above our es- Stage I: Explicit Forecast
ferred stock (and any other funding sources), using ex-
Morningstar Equity Research Star Rating Methodology pected future proportionate long-term, market-value
weights.
3. Uncertainty Around That Fair Value Estimate

Morningstar's Uncertainty Rating captures a range of
likely potential intrinsic values for a company and uses it
to assign the margin of safety required before investing,
which in turn explicitly drives our stock star rating system.
The Uncertainty Rating represents the analysts' ability to
ß
bound the estimated value of the shares in a company Morningstar Equity Research Star Rating Methodology
around the Fair Value Estimate, based on the character-
istics of the business underlying the stock, including oper-
ating and financial leverage, sales sensitivity to the over-
all economy, product concentration, pricing power, expos-
ure to material ESG risks, and other company-specific
factors.
Analysts consider at least two scenarios in addition to

their base case: a bull case and a bear case. Assumptions
are chosen such that the analyst believes there is a 25%
probability that the company will perform better than the
bull case, and a 25% probability that the company will
perform worse than the bear case. The distance between
the bull and bear cases is an important indicator of the
uncertainty underlying the fair value estimate. In cases
where there is less than a 25% probability of an event,
but where the event could result in a material decline in
value, analysts may adjust the uncertainty rating to re-
flect the increased risk. Analysts may also make a fair
value adjustment to reflect the impact of this event.
Our recommended margin of safety widens as our uncer-

tainty of the estimated value of the equity increases. The
more uncertain we are about the estimated value of the
equity, the greater the discount we require relative to our tabs on the companies they follow, and, based on thor QQQQ We believe appreciation beyond a fair risk-ad-
estimate of the value of the firm before we would recom- ough and ongoing analysis, raise or lower their fair value justed return is likely.
mend the purchase of the shares. In addition, the uncer- estimates as warranted.
tainty rating provides guidance in portfolio construction QQQ Indicates our belief that investors are likely to re-
based on risk tolerance. Please note, there is no predefined distribution of stars. ceive a fair risk-adjusted return (approximately cost of
That is, the percentage of stocks that earn 5 stars can equity).
Our uncertainty ratings for our qualitative analysis are fluctuate daily, so the star ratings, in the aggregate, can
low, medium, high, very high, and extreme. serve as a gauge of the broader market’s valuation. When QQ We believe investors are likely to receive a less than
there are many 5-star stocks, the stock market as a whole fair risk-adjusted return.
Margin of Safety
is more undervalued, in our opinion, than when very few
Qualitative Analysis
QRating companies garner our highest rating. Q Indicates a high probability of undesirable risk-adjus-
Uncertainty Ratings QQQQQRating
ted returns from the current market price over a multiyear
Low 20% Discount 25% Premium
We expect that if our base-case assumptions are true the time frame, based on our analysis. Scenario analysis by
Medium 30% Discount 35% Premium
market price will converge on our fair value estimate over our analysts indicates that the market is pricing in an ex-
High 40% Discount 55% Premium
time generally within three years (although it is im- cessively optimistic outlook, limiting upside potential and
Very High 50% Discount 75% Premium
possible to predict the exact time frame in which market leaving the investor exposed to Capital loss.
Extreme 75% Discount 300% Premium
prices may adjust).
Other Definitions
4. Market Price Our star ratings are guideposts to a broad audience and Last Price: Price of the stock as of the close of the mar-
The market prices used in this analysis and noted in the individuals must consider their own specific investment ket of the last trading day before date of the report.
report come from exchange on which the stock is listed goals, risk tolerance, tax situation, time horizon, income
which we believe is a reliable source. needs, and complete investment portfolio, among other Capital Allocation Rating: Our Capital Allocation (or
factors. Stewardship) Rating represents our assessment of the
For more details about our methodology, please go to
quality of management’s capital allocation, with particu-
https://shareholders.morningstar.com. The Morningstar Star Ratings for stocks are defined be- lar emphasis on the firm’s balance sheet, investments,
low: and shareholder distributions. Analysts consider compan-
Morningstar Star Rating for Stocks QQQQQ We believe appreciation beyond a fair risk ad- ies’ investment strategy and valuation, balance sheet
Once we determine the fair value estimate of a stock, we justed return is highly likely over a multiyear time frame. management, and dividend and share buyback policies.
compare it with the stock’s current market price on a Scenario analysis developed by our analysts indicates Corporate governance factors are only considered if they
daily basis, and the star rating is automatically re-calcu- that the current market price represents an excessively are likely to materially impact shareholder value, though
lated at the market close on every day the market on pessimistic outlook, limiting downside risk and maximiz- either the balance sheet, investment, or shareholder dis-
which the stock is listed is open. Our analysts keep close ing upside potential. tributions. Analysts assign one of three ratings: "Exem-
ß
plary", "Standard", or "Poor". Analysts judge Capital Alloc- medium, high, severe). These risk categories are absolute, The information, data, analyses and opinions presented
ation from an equity holder’s perspective. Ratings are de- meaning that a ‘high risk’ assessment reflects a compar- herein are not warranted to be accurate, correct, com-
termined on a forward looking and absolute basis. The able degree of unmanaged ESG risk across all subindus- plete or timely. Unless otherwise provided in a separate
Standard rating is most common as most managers will tries covered. agreement, neither Morningstar, Inc. or the Equity Re-
exhibit neither exceptionally strong nor poor capital alloc- search Group represents that the report contents meet all
ation. The ESG Risk Rating Assessment is a visual representa- of the presentation and/or disclosure standards applic-
tion of Sustainalytics ESG Risk Categories on a 1 to 5 able in the jurisdiction the recipient is located.
Capital Allocation (or Stewardship) analysis published pri- scale. Companies with Negligible Risk = 5 Globes, Low
or to Dec. 9, 2020, was determined using a different pro- Risk = 4, Medium Risk = 3 Globes, High Risk = 2 Globes, Except as otherwise required by law or provided for in a
cess. Beyond investment strategy, financial leverage, and Severe Risk = 1 Globe. For more information, please visit separate agreement, the analyst, Morningstar, Inc. and
dividend and share buyback policies, analysts also con- sustainalytics.com/esg-ratings/ the Equity Research Group and their officers, directors
sidered execution, compensation, related party transac- and employees shall not be responsible or liable for any
tions, and accounting practices in the rating. Ratings should not be used as the sole basis in evaluating trading decisions, damages or other losses resulting from,
a company or security. Ratings involve unknown risks and or related to, the information, data, analyses or opinions
Capital Allocation Rating: Our Capital Allocation (or uncertainties which may cause our expectations not to within the report. The Equity Research Group encourages
Stewardship) Rating represents our assessment of the occur or to differ significantly from what was expected recipients recipients of this report to read all relevant is-
quality of management’s capital allocation, with particu- and should not be considered an offer or solicitation to sue documents (e.g., prospectus) pertaining to the secur-
lar emphasis on the firm’s balance sheet, investments, buy or sell a security. ity concerned, including without limitation, information
and shareholder distributions. Analysts consider compan- relevant to its investment objectives, risks, and costs be-
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management, and dividend and share buyback policies. Please note that investments in securities are subject to necessary, to seek the advice of a legal, tax, and/or ac-
Corporate governance factors are only considered if they market and other risks and there is no assurance or guar- counting professional.
are likely to materially impact shareholder value, though antee that the intended investment objectives will be
either the balance sheet, investment, or shareholder dis- achieved. Past performance of a security may or may not The Report and its contents are not directed to, or inten-
tributions. Analysts assign one of three ratings: "Exem- be sustained in future and is no indication of future per- ded for distribution to or use by, any person or entity who
plary", "Standard", or "Poor". Analysts judge Capital Alloc- formance. A security investment return and an investor’s is a citizen or resident of or located in any locality, state,
ation from an equity holder’s perspective. Ratings are de- principal value will fluctuate so that, when redeemed, an country or other jurisdiction where such distribution, pub-
termined on a forward looking and absolute basis. The investor’s shares may be worth more or less than their lication, availability or use would be contrary to law or
Standard rating is most common as most managers will original cost. A security’s current investment performance regulation or which would subject Morningstar, Inc. or its
exhibit neither exceptionally strong nor poor capital alloc- may be lower or higher than the investment performance affiliates to any registration or licensing requirements in
ation. noted within the report. Morningstar’s Uncertainty Rating such jurisdiction.
serves as a useful data point with respect to sensitivity
Capital Allocation (or Stewardship) analysis published pri- analysis of the assumptions used in our determining a fair Where this report is made available in a language other
or to Dec. 9, 2020, was determined using a different pro- value price. than English and in the case of inconsistencies between
cess. Beyond investment strategy, financial leverage, and the English and translated versions of the report, the Eng-
dividend and share buyback policies, analysts also con- lish version will control and supersede any ambiguities
sidered execution, compensation, related party transac- General Disclosure associated with any part or section of a report that has
tions, and accounting practices in the rating. been issued in a foreign language. Neither the analyst,
Unless otherwise provided in a separate agreement, re-
cipients accessing this report may only use it in the coun- Morningstar, Inc., or the Equity Research Group guaran-
Sustainalytics ESG Risk Rating Assessment:The ESG
try in which the Morningstar distributor is based. Unless tees the accuracy of the translations.
Risk Rating Assessment is provided by Sustainalytics; a
stated otherwise, the original distributor of the report is
Morningstar company.
Morningstar Research Services LLC, a U.S.A. domiciled This report may be distributed in certain localities, coun-
financial institution. tries and/or jurisdictions (“Territories”) by independent
Sustainalytics’ ESG Risk Ratings measure the degree to
third parties or independent intermediaries and/or distrib-
which company’s economic value at risk is driven by en-
This report is for informational purposes only and has no utors (“Distributors”). Such Distributors are not acting as
vironment, social and governance (ESG) factors.
regard to the specific investment objectives, financial agents or representatives of the analyst, Morningstar,
situation or particular needs of any specific recipient. This Inc. or the Equity Research Group. In Territories where a
Sustainalytics analyzes over 1,300 data points to assess a
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company’s exposure to and management of ESG risks. In
stitutional investors in making their own investment de- responsible for complying with all applicable regulations,
other words, ESG Risk Ratings measures a company’s un-
cisions, not to provide investment advice to any specific laws, rules, circulars, codes and guidelines established by
managed ESG Risks represented as a quantitative score.
investor. Therefore, investments discussed and recom- local and/or regional regulatory bodies, including laws in
Unmanaged Risk is measured on an open-ended scale
mendations made herein may not be suitable for all in- connection with the distribution third-party research re-
starting at zero (no risk) with lower scores representing
vestors: recipients must exercise their own independent ports.
less unmanaged risk and, for 95% of cases, the unman-
judgment as to the suitability of such investments and re-
aged ESG Risk score is below 50.
commendations in the light of their own investment ob- Conflicts of Interest
jectives, experience, taxation status and financial posi- u No interests are held by the analyst with respect to the
Based on their quantitative scores, companies are
tion. security subject of this investment research report.
grouped into one of five Risk Categories (negligible, low,
ß
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Morningstar Equity Analyst Report | Report as of 19 Nov 2021 00:20, UTC | Reporting Currency: USD | Trading Currency: USD

| Exchange: NASDAQ - ALL MARKETS Page 1 of 18

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Price vs. Fair Value

Fair Value: 61.00

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Fair Value Fair Value Fair Value Fair Value

Last Close Last Close

Economic Moat Narrow Wide Narrow Narrow

u Paramount+ is poised to gain share and drive top-line growth.

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Analyst Notes Archive

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Competitors Price vs. Fair Value

The Walt Disney Co DIS

Fair Value: 170.00

AMC Networks Inc Class A AMCX

Fair Value: 58.00

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Fox Corp Class A FOXA

Fair Value: 41.00

ViacomCBS Inc Class B VIAC QQQQQ 18 Nov 2021 22:23, UTC

Morningstar Historical Summary

Valuation as of 29 Oct 2021

Morningstar Analyst Historical/Forecast Summary as of 04 Nov 2021

Research Methodology for Valuing Companies

3. Uncertainty Around That Fair Value Estimate

Research Methodology for Valuing Companies

Analysts consider at least two scenarios in addition to

Our recommended margin of safety widens as our uncer-

Research Methodology for Valuing Companies

Research Methodology for Valuing Companies

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