Research firm Brean Capital upgraded Viacom (VIA, VIA.B) to Buy from Hold, saying that the company has a number of potential positive catalysts, while the stock’s risk/reward ratio “has become quite positive” with most, if not all, of the negatives, fully priced into the shares at current levels.

POTENTIAL CATALYSTS: Viacom’s new management team may be able to implement a plan to revitalize the company’s cable networks, according to Brean Capital analyst Alan Gould. The team could also create a plan to enable Viacom’s movie unit, Paramount, to at least break even, Gould added. Additionally, Viacom may sell a 40% stake in Paramount for $4B+ after tax, and the company could potentially recombine with CBS (CBS), the analyst stated. In the latter scenario, Viacom would be valued at $47 per share in the next 12 months, he estimated. In a much less likely scenario, Viacom could be acquired by a company other than CBS, Gould believes.

RISKS WELL-KNOWN, DISCOUNTED: The risks facing Viacom, including its high debt levels and the high likelihood that its dividend will be cut, are well-known and are already reflected in its stock price, the analyst stated. However, Gould says that the company does not have any liquidity risk. He set a $44 price target on the shares.

PRICE ACTION: In early trading, Class B shares of Viacom fell 1.5% to $37.52 while Class A shares similarly slid 1.5% to $42 per share.