Nomura Equity Research’s Michael Nathanson underscored his concern about the upcoming earnings reports by cutting his Q3 estimates across the board this morning. He dropped CBS by 5.2% (to 60 cents in Q3 earnings per share), News Corp by 4.6% (to 40 cents), Disney by 4.5% (to 69 cents), Discovery by 3.2% (to 63 cents) Scripps Networks by 2.7% (to 77 cents), Viacom by 1.3% (to $1.16) and Time Warner by 1% (to 81 cents). Nathanson notes that “we did not get much of an update” from media execs when they were asked at recent investor conferences about the state of the ad market. The analyst projects that the companies collectively will show a 1.1% drop in ad sales in Q3, due in part to disruptions from the Olympics and later-than-expected purchases by political campaigns. While everyone expects sales to improve, Nathanson says that “recent trends don’t give much hope for 4Q upside ad surprises.” He’s also concerned about trends in broadcast TV ratings: The major networks were down in 35 out of 49 non-Olympics weeks in the season that just ended and “broadcast trends in 3Q have been disappointing.” He also lowered film studio estimates for Time Warner, Disney, and CBS — leaving News Corp and Viacom unchanged — saying that “fewer releases for some in the quarter actually help the bottom line.”

But here’s a twist. Media company stock prices could continue to rise, even if Q3 earnings are a let-down. Investors are valuing media companies at historically high multiples of their earnings. “Frankly, we have been surprised,” Nathanson says. He knows it’s futile to fight the market: He raised his target prices for Viacom (by $5 to $58), CBS ($2 to $38), Time Warner ($3 to $45), Scripps Networks ($3 to $56) and Discovery ($2 to $52), leaving unchanged News Corp ($28) and Disney ($55).