ViacomCBS Stock Jumps 13% In A Week – What’s Next?

by Trefis Team
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ViacomCBS stock (NASDAQ: VIAC) saw an impressive rise of 13% in just the last one week and currently trades near $45 per share. The rise was driven by a multi-year affiliation deal signed with Sinclair last week. This deal comes just a couple of days after the company signed another deal with Disney’s Hulu. Both the deals are expected to help ViacomCBS boost the viewership of its cable networks, which will be reflected in the form of higher ViacomCBS revenues in 2021.

According to the Trefis Machine Learning Engine, which identifies historical trends in a company’s stock price data, returns for ViacomCBS stock average close to 24% in the next three-month (63 trading days) period after experiencing a 13% rise over the previous one-week (5 trading days) period. Notably, though, the stock is likely to outperform the S&P500 over the next three-month (63 trading days), with an expected excess return of 15% compared to the S&P500.

But how would these numbers change if you are interested in holding ViacomCBS stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test ViacomCBS stock chances of a rise after a fall and vice-versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF ViacomCBS stock moved by -5% over 5 trading days, THEN over the next 21 trading days, VIAC stock moves an average of 0.2 percent, which implies an excess return of -0.8 percent compared to the S&P500.

More importantly, there is 50% probability of a positive return over the next 21 trading days and 45% probability of a positive excess return after a -5% change over 5 trading days.

Some Fun Scenarios, FAQs & Making Sense of ViacomCBS Stock Movements:

Question 1: Is the average return for ViacomCBS stock higher after a drop?

Answer:

Consider two situations,

Case 1: ViacomCBS stock drops by -5% or more in a week

Case 2: ViacomCBS stock rises by 5% or more in a week

Is the average return for ViacomCBS stock higher over the subsequent month after Case 1 or Case 2?

VIAC stock fares better after Case 2 — with an average return of -2.1% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 4.8% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how ViacomCBS stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold ViacomCBS stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and the Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For VIAC stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

Generally the average return for a stock after a rise is lower than after a fall. Similarly, average return after a fall is likely to be more than after a rise. Interestingly, ViacomCBS stock seems to be an exception to this observation. Historical data suggests that even after rising, VIAC stock largely continues to trend higher. The below table summarizes this observation.

VIAC’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for ViacomCBS stock by changing the inputs in the charts above.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

 

See all Trefis Price Estimates and Download Trefis Data here

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