Analyst David Karnovsky of J.P. Morgan maintained a Sell rating on Paramount Global Class B (PARA – Research Report), with a price target of $11.00.
David Karnovsky has given his Sell rating due to a combination of factors affecting Paramount Global Class B. Despite some positive developments in the Direct-to-Consumer (DTC) segment, such as a slight increase in adjusted OIBDA and free cash flow estimates for 2025, there are significant challenges in other areas. The TV Media segment is expected to face ongoing pressures from recent affiliate agreements and broader industry challenges, leading to a reduction in OIBDA estimates. Additionally, the Filmed Entertainment segment’s performance has been underwhelming, prompting a decrease in OIBDA projections for this area as well.
Furthermore, while there is some optimism around the DTC segment’s potential profitability and engagement improvements, the overall financial outlook for Paramount is weighed down by anticipated losses in the DTC segment through 2026. This, combined with the company’s valuation premium compared to its peers, lack of scale in DTC, and exposure to linear media, contributes to the Sell rating. The macroeconomic uncertainties and the company’s significant reliance on declining PayTV revenues further compound the challenges, justifying the cautious stance on Paramount’s stock.
In another report released on February 27, Barclays also maintained a Sell rating on the stock with a $12.00 price target.
PARA’s price has also changed slightly for the past six months – from $10.420 to $11.310, which is a 8.54% increase.