Cowen Downgrades BIg Media Stocks

On July 23, Cowen & Company downgraded three names in Big Media based on the stance that the sector has taken a turn for the worse. More specifically, the firm noted three- Advertising trends, theatrical demand, and M&A/competitive pressure -of the five key factors it uses to gauge the attractiveness have turned negative.Time Warner Inc. (NYSE: TWX) - down from Outperform to Market Perform, $77 price target.The Cowen analysts say further upside potential in Time Warner's share price due a higher bid from 21st Century Fox (NASDAQ: FOXA) is offset by the possibility that Fox could fail or simply walk away.Cowen believes Time Warner has the best collection of content and was on the verge of moving the company to its top pick in the sector. However due to the unsolicited Fox bid, the firm prefers to move to the side line.21st Century Fox (NASDAQ: FOXA) - down from Outperform to Underperform, $29 price target.The analyst at Cowen say the Time Warner offer doesn't make much sense strategically. Moreover, they called supposed need for HBO in order to compete with Netflix (NASDAQ: NFLX) a "red herring."Instead of chasing Time Warner, the Cowen team rather see 21st Century Fox's management focus on fixings ratings and ensuring a return on investment in its international business.VIacom, Inc. (NASDAQ: VIA) - down from Outperform to Market Perform, $97 price target.As for the Viacom downgrade, the analysts pointed to a 7.6 percent year-over-year decline in the company's ad-revenue weighted aggregate ratings. To this point, the team note it hasn't seen too many periods of outperformance amid negative ratings trends.