This morning, Wells Fargo analyst Marci Ryvicker upgraded Disney (DIS) to Outperform as the company ventures into direct-to-consumer streaming. Meanwhile, the analyst also downgraded Viacom (VIAB) to Market Perform, citing lack of visibility into a turnaround.

BUY DISNEY: In a research note to investors, Wells Fargo's Ryvicker upgraded Disney to Outperform from Market Perform and raised her price target on the shares to $116 from $109. With Disney's foray into direct-to-consumer streaming, the analyst believes the TV ecosystem will soon embark on an accelerated over-the-top path. Investors may need to start thinking about increasing exposure to those media companies with solid streaming strategies, such as CBS (CBS), 21st Century Fox (FOXA), and Disney, and lessen exposure to those that do not, such as Viacom and Scripps Networks (SNI)/Discovery (DISCA), Ryvicker argued. Further, the analyst told investors that she views concerns over potential dilution from the BAMTech stake and the streaming apps as "widely overdone." Ryvicker likes the entry point for Disney even if it is still "early."

MOVING TO THE SIDELINES ON VIACOM: While upgrading the owner of ESPN and ABC, Wells Fargo's Ryvicker downgraded Viacom to Market Perform from Outperform and lowered her price target on the shares to $32 from $43, saying she does not have as much visibility into a turnaround as she thought she would have by now. The analyst acknowledged that she "erroneously" thought positive ratings momentum at MTV would be "THE" positive catalyst for Viacom. While viewership at this network has improved, overall affiliate fee growth has decelerated, she noted. With no visibility into the non-sports streaming bundles, the Charter (CHTR) carriage renewal, Paramount's slate financing, or long-term affiliate fee growth, Ryvicker believes it is tough to support the stock.

PRICE ACTION: Near noon, Disney is flat near $101 per share, while Viacom's stock has dropped nearly 4% to $27.42