MTV’s return to music won’t save Viacom: Analyst

MTV's announcement that it will place greater focus on music is unlikely to save Viacom, but it gives the parent company the opportunity to show it can turn around its business, FBR Capital Markets' Barton Crockett said Monday.

Last week, Viacom announced five of its 14 announced series would focus on music. The series include a revival of "MTV Unplugged" and a music competition from Mark Burnett, executive producer of NBC's hit series "The Voice."

Even if successful, MTV's return to its roots after years of specializing in reality TV wouldn't change FBR's prices target or stock rating, said Crocket, senior media analyst at FBR. However, it would be "icing on the cake" to bigger-picture developments like a deal with Dish Network to avoid an outage of Viacom channels and a bid to sell a minority stake in its movie studio, Paramount Pictures.

"The expectations are so low that if anything works, it could be really terrific for the stock because people think they can't do anything right. So if they can get something right, that would be great," Crockett told CNBC's "Squawk Box."

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Shares of Viacom have picked up momentum since the Dish deal, but are down about 39 percent over the last year as the company has seen advertising revenue for its cable networks fall and weakness in its film entertainment division. Questions involving the health of 92-year-old majority owner Sumner Redstone had also weighed on the stock.

The stock, which trades at about $43, is likely worth $51 a share, according to Crockett. He said it is currently one of the cheapest big-cap stocks in the S&P 500 and noted that 1 in 5 viewers tune in to Viacom's channels each day.

Still, Crockett said the optimal outcome for Viacom would be for the company to be broken up if it cannot put up a win. The diverse assets — which also include Comedy Central and Nickelodeon — could make more money as parts of other conglomerates, he said.

Nickelodeon in particular continues to command a large share of young live TV watchers, he added.

"Things like MTV, the turnaround there is important if these guys want to stay together. They've got to make the case that they can do something really interesting and exciting with the business," he said.

Disclosure: NBCUniversal is the parent company of CNBC and