The biggest

Westinghouse

(WX)

bull has retreated to the barn.

Nicholas Heymann

, who follows Westinghouse for

NatWest Securities

, last week downgraded the stock to hold, ending a buy rating that dates back at least to 1995. In fact, when Westinghouse had few friends on Wall Street, it could always count on Heymann. When the company's 1995 third-quarter earnings fell short of expectations, for instance, Heymann maintained his buy rating, according to

Nelson's Institutional Research Headlines

.

So when the biggest bull runs the other way, investors should follow, right? Wrong.

Several other analysts, including the two who follow the company at

Schroder Wertheim

, actually are boosting their ratings.

This favorable attention comes as Westinghouse prepares to split itself into a media company and an industrial company later this year, a move that addresses the problem many investors have with the diversified company.

So Heymann looks more and more like a contrarian indicator. After all, the Dow component's stock has risen just 17.8% from March 1995, the oldest date at which

Nelson's

shows Heymann had a buy rating, through Feb. 10, the day before he changed his rating. The

S&P 500

jumped 61.8% in that time period.

And his predictions on the company often have proven incorrect. In July 1995, for example, Heymann told the

Associated Press

that a Westinghouse bid for

CBS

was "highly improbable. ¿ It's hard to make any logic of it." Just a month later, the $5.4 billion transaction was announced.

One of Heymann's better calls was that Westinghouse shareholders would do well in 1995, a year when the stock increased about 30%, not far behind the S&P 500's nearly 34% gain. According to

Nelson's

, Heymann made that call in May, though, when Westinghouse's stock already was up nearly 16%. NatWest has not done any recent underwriting for Westinghouse.

Heymann's current problem with Westinghouse was bred in its pending acquisition of two country music cable channels from

Gaylord Entertainment

(GET)

for $1.55 billion.

In his report, Heymann says, "Westinghouse's urge to complete this transaction prior to its own separation of its media and industrial operations, itself long expected to be a value enhancing exercise, raises doubt that a knowledgeable media company believes Westinghouse's subsequent share price will benefit from the expected split of its operations."

In addition, he questions Westinghouse's earnings growth before income taxes, depreciation and amortization, a key indicator for media companies. And he notes that Westinghouse failed to get the Gaylord family to sign a lock-up agreement, which means that its members can sell the shares they receive in the transaction, depressing the stock.

"Look for the stock to trade 15 to 19 pending clearer evidence of fundamental improvement at media operations and better assurances about Gaylord holdings," he writes. The stock, which has changed little since he lowered his rating, closed Tuesday at 17 5/8. The best way for near-term stock improvement: Westinghouse being acquired, Heymann writes, a theme he has discussed informally for nearly two years. Heymann didn't return phone calls seeking comment.

Meanwhile, other analysts like the transaction, saying it gives Westinghouse a much-needed presence in cable TV. "The company had a very near-term growth rate that's about average for the

media industry. Gaylord enables the company to keep up an above-average growth rate," says Frank Bodenchak at

Morgan Stanley

, which has not done any recent underwriting for Westinghouse.

Bodenchak, who rates the stock an outperform, adds that the stock has upside potential since it's trading so low now. "The network is starting to show improved ratings in each of its day parts," he says. "I'm not expecting a dramatic rebound, but the trends are quite positive." Bodenchak's target price is 22.

Schroder Wertheim's analysts following the company raised their rating last week to buy from hold, in part because of Westinghouse's strong radio business. In addition, David Pizzimenti, who follows the industrial side of Westinghouse for the firm, says the company's power generation business is seeing prices stabilize after a long decline. Schroder Wertheim hasn't done any recent underwriting for Westinghouse.

Suzanne H. Betts, an analyst with

Goldis-Pittsburg Institutional Services

, a Garden City, N.Y.-based research firm, agrees that there's potential in the industrial side. But she favors the media side of the house, citing

CBS'

improved ratings and desire to push back into sports programming. Says Betts, "This is definitely a good time to buy."

By Erle Norton

enorton@thestreet.com