The firm cut its price target on shares of the New York City-based local media holding company to $13 from $17.
Bullish investors forecast "$1 billion of M&A" by the end of 2016, further synergies and a robust dividend, Citi said in an analyst note, according to TheFly.
The firm said the bear case is more likely, with no new mergers and growing investor anxiety about the sustainability of the dividend.
Additionally, New Media recently reported mixed second-quarter results.
The company posted earnings of 21 cents per share, below analysts' projected 29 cents per share. Revenue came in at $314.8 million, beating consensus estimates of $311.88 million.
New Media is a publisher of locally based print and online media with segments in the Eastern, Central and Western regions of the U.S.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NEW MEDIA INVESTMENT GROUP as a Buy with a ratings score of B-. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.