Bernstein Research analyst Todd Juenger has written several provocative reports in the five months since he began covering media for the investment company — but his blast today at Viacom ranks among his toughest yet. Juenger lowered his price target by $1 to $47 warning investors that, with the steep ratings declines at Nickelodeon and MTV, “it is no longer inconceivable that a distributor would drop Viacom, or at least engage in a public battle with them over price increases.” While the odds of a Viacom black out are low, the mere possibility could make a world of difference to Wall Street: If CEO Philippe Dauman can’t extract high-single digit annual fee increases from cable and satellite companies then “the Viacom story would unravel.” It’s hard to say when Viacom might run into trouble, if it happens at all. “The timing of (its) affiliate fee negotiations remain the best kept secret in media,” Juenger says. But he adds that prudent investors should lighten up on their Viacom holdings “before such an event took place.”

This isn’t Juenger’s first blast at Viacom: He has already championed an argument that Dauman disputes — that Viacom shot itself in the foot by licensing Nickelodeon content to Netflix. That contributed to the drop in Nick’s pay TV ratings, the analyst says. Viacom can’t afford to admit it made a mistake, he adds. The company’s earnings would fall far short of forecasts if it had to give up the Netflix revenues next year when the companies’ licensing deal is up for renewal. Meanwhile he says that Nickelodeon is opting for a dangerous quick fix, compensating for its lost ratings by packing additional ads into its shows. Over time “advertisers notice and it will cause CPM’s to go down.” In that context, Juenger portrays Disney’s recent decision to eschew junk-food ads on its kids’ networks as a Machiavellian masterstroke. Now Viacom and Time Warner (which owns Cartoon Network) will have to take a stand. Viacom “has much more revenue to lose if they start turning away this advertising, but if they continue to accept ‘junk food’ advertising they risk being considered unconcerned about kids’ health.”

Juenger also believes that Paramount won’t help to rescue Viacom. “Unfortunately for today’s investors, it is destroying value” — generating returns that are well below the company’s borrowing costs — the analyst says. Just to break even, the studio would have to increase its operating income by at least $55M over its fiscal 2010 results, and that job will become harder without distribution agreements for films by Marvel and (at the end of this year) DreamWorks Animation. “Paramount is the only major theatrical studio without a major TV Production arm, which is the most attractive line of business for the other studios,” Juenger says.