CBS Corp (NYSE:CBS), the television network, had its stock downgraded to "market perform" from "outperform" by Telsey Advisory Group, which cited the increasing likelihood CBS will combine with Viacom (NASDAQ:VIAB). Telsey said it feels CBS has better metrics by itself than it would when combined with Viacom.
The timing was not great for Viacom either, at least from a credit ratings standpoint. Moody’s cut its ratings on Viacom from Baa2 to Baa3 on Thursday, putting the struggling media group just a notch above junk level.
The downgrade comes a day after the owner of Paramount Pictures, MTV and Nickelodeon said it would tap debt markets and slashed its dividend payout by 50% to shore up its finances. Viacom is saddled with some $12bn in debt — constraining the company from investment to reboot its ailing television programming.
CBS shares ended down 0.02% at $50.07 and Viacom shares down 0.08% at $35.82.