Veteran media analyst Barton Crockett of B. Riley FBR is maintaining his “buy” rating on Viacom’s stock, but has slashed his 12-month price target to $30 from $39 and lowered his earnings estimates.

The primary motivation for the reductions is Crockett’s revised forecast for Paramount Pictures, which calls for a likely “movie ebb” in 2019. Also, while he considers a merger between Viacom and CBS “decidedly likely” by 2020, a reunion isn’t apt to spark a wider takeover battle. That means much less of a boost to Viacom shares than the windfall for 21st Century Fox amid the escalation of bidding for its studio assets between Disney and Comcast.

Viacom stock closed unchanged today at $25.89, which is down more than 10% from where it started 2018 (though it must be noted that most media stocks have struggled this year).

In a research note, Crockett offered what he called a “refined view” of Viacom’s film business. Paramount’s turnaround has recently been a point of pride for the parent company, with studio boss Jim Gianopulos joining the company’s last quarterly earnings call in November to italicize those bullet points. But Crockett now expects a loss in Paramount’s current quarter, which is the first of fiscal 2019.

Paramount

“We now forecast an adjusted operating income loss of $92 million, versus estimating a profit of $52 million previously,” Crockett wrote about Paramount. “This change is tied to front-loading of marketing spend for holiday release Bumblebee. We see this movie as having some success in reviving the Transformers franchise and driving reasonable ultimate profits to Viacom. But because of spending to market the movie in advance of revenues, we see losses in the initial quarter more than recouped in later periods.”

The critically praised Bumblebee opened in the long shadow of Aquaman and has grossed a modest $78 million worldwide in its first week. On the plus side, it still has some open playtime in front of it and carries a lower price tag than the main Transformer franchise’s five Michael Bay-helmed outings.

Despite the timing of marketing costs versus revenue in the quarter (a common split in movie business accounting), Crockett is projecting a profit at Paramount for the full year 2019. Even so, he has adopted “a slightly more conservative view” of Paramount and Viacom’s cable networks, with the latter facing “currency and cost pressures, and a tepid core ratings environment.”

Paramount’s progress is especially encouraging on the TV side, Crockett said, where operating profits have doubled amid strong demand from a range of buyers. But a closer look at Paramount’s upcoming film slate “argues for a base case assumption that the new films this year can’t match the profitability of” 2018 breakouts A Quiet Place and Mission: Impossible – Fallout, he added.

After a “movie ebb” in 2019, Crockett sees a stronger 2020 with titles like Spongebob, A Quiet Place 2Top Gun, and Gemini Man, the Will Smith outing directed by Ang Lee.

Crockett said his main reason for endorsing the stock and predicting an upswing in its price — albeit a lesser one than before — “a high probability of a merger of Viacom and CBS within two years.” The analyst is in good company in predicting a reunion of the onetime corporate siblings (which are still controlled by a common shareholder, National Amusements). To Crockett, a merger is “decidedly likely … given past explorations and a media environment that increasingly seems to favor scale in content production and online presence.”

For CBS, he adds, a merger could help the company still reeling from the exit of longtime CEO Les Moonves and a host of related complications “garner more separation from its recent corporate governance debacles.”