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Update: Viacom downgraded, CBS upgraded as companies drop merger plan

At least two analysts reportedly downgraded Viacom Inc. and one analyst upgraded CBS Corp. after holding company National Amusements Inc. withdrew its proposal to merge the two companies.

RBC Capital analyst Steven Cahall downgraded Viacom to "underperform" from "sector perform," stating that the company is "structurally challenged" without CBS, and "faces more cord cutting risk, ratings risk and movie slate risk" than its peers, theFly.com reported.

Wedbush analyst James Dix lowered Viacom's rating to "neutral" from "outperform," noting challenges at its TV networks, the report added. Dix lowered the price target on Viacom's shares to $39 from $46.

Meanwhile, theFly.com reported that BMO Capital analyst Daniel Salmon upgraded CBS to "outperform" from "market perform." Salmon said that CBS could be a "very attractive takeover target," noting media reports of potential interest from Verizon Communications Inc. AT&T Inc. might also be interested, he said. Salmon upped his price target on CBS to $70 from $63.