It’s time to sell shares of Paramount , as investors can expect greater macro challenges ahead for the legacy media company, according to JPMorgan. “Today we downgrade Paramount to Underweight from Neutral with a $25 price target due to softer DTC revenue and higher losses this year, as well as an expectation of weakening EBITDA and cash flow over the next year,” JPMorgan analyst Philip Cusick wrote in a note Friday. Paramount posted a robust second-quarter earnings report, boosted by revenue from “Top Gun: Maverick,” but falling income and free cash flow weighed on results for investors. Paramount will have to step up investments in streaming, which will continue to hurt the company’s EBITDA and free cash flow, the analyst said. The media company, previously known as ViacomCBS, is dealing with a competitive streaming environment, an uncertain outlook for the film industry and deteriorating advertising revenue. JPMorgan said it prefers rivals Disney and Fox. “We believe PARA’s > 4x premium on 2023E EV/EBITDA vs FOXA and WBD is unwarranted given slowing DTC growth, a challenged macro backdrop, and declining OIBDA,” Cusick wrote. “While we like PARA’s mix of DTC assets, we believe the company’s lack of scale will make it difficult to succeed in the increasingly competitive streaming marketplace: the company is a longterm execution story,” Cusick added. The analyst established a $25 price target for December 2023, compared with the prior $39 price target for year-end 2022. The new price target is roughly in line with Thursday’s closing price of $25.31. Shares of Paramount declined 2% in Friday premarket trading. — CNBC’s Michael Bloom contributed to this report.