Shares of Viacom Inc., which owns MTV Networks, BET Networks and Paramount Pictures, slipped on Friday after an analyst lowered the stock's rating to "Neutral" and said advertising declines may be steeper than expected in 2009.
Viacom shares fell 29 cents, or 1.6 percent, to $17.70 in afternoon trading. The stock has traded between $13 and $42.55 during the past 52 weeks.
UBS Investment Research analyst Michael Morris downgraded the stock to "Neutral" from "Buy," arguing that increased corporate defaults in 2009 could put more pressure on Viacom's ad sales than previously expected.
Morris said expectations for Viacom's 2009 film results are also too high in light of a reduced movie slate and fewer blockbuster distribution deals.
The analyst also noted that Viacom has $750 million in senior notes due in June 2009 and a $1.5 billion term facility maturing in 2010.
For the longer term, Morris cited concerns about ongoing performance and structural issues, including ratings declines at the company's core networks, weak results by Viacom's Paramount unit and an "inefficient ownership structure" that gives voting control to Chairman Sumner Redstone.
Morris lowered his estimate for Viacom's 2009 earnings per share to $1.99 from $2.35. Analysts polled by Thomson Reuters forecast 2009 earnings of $2.38 per share.
