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Tuesday, Benchmark analysts adjusted their outlook on Paramount Global (NASDAQ: PARA), reducing the price target to $16.00 from $19.00 while sustaining a Buy rating on the company’s shares. Currently trading at $11.29, InvestingPro analysis suggests the stock is undervalued. The revision comes amid a series of challenges including weaker advertising revenue, slower subscriber growth for the company’s streaming service Paramount+, and additional obstacles in affiliate and licensing revenue.
The analysts noted that Paramount has been frequently in the news, not just for the industry-wide concerns such as film tariffs but also for company-specific issues. Despite these challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 1.3, and has sustained dividend payments for 20 consecutive years. These challenges have led Benchmark to significantly lower their forecasts for Paramount, although they still remain above the street’s expectations for 2025.
The ongoing speculation around a potential deal, which has seen its merger date postponed with no resolution to the concerns raised by the President and the Federal Communications Commission ( FCC (BME:FCC)), has also impacted the company’s outlook. Benchmark analysts speculate that Paramount may end up paying fines and making reparations as part of resolving these issues, similar to other major headlines.
Further delays in the deal’s closure, according to Benchmark, could position Paramount at the forefront of another major advertising pullback. This is compounded by the fact that necessary operational changes are being postponed. Despite these hurdles, Benchmark maintains an optimistic view for a merged Paramount in 2026, assuming a return to a normalized macroeconomic environment.
However, this optimism is tempered by the potential impact of FCC regulations that could limit reverse retransmission consent fees to 30%, which would affect an estimated $1.7 billion of Paramount’s $29.21B annual revenue. While the company isn’t currently profitable, InvestingPro analysts forecast a return to profitability this year. The analysts concluded that the current fundamental factors are of less importance compared to the speculative nature of the deal’s outcome and its eventual closure. For deeper insights into Paramount’s financial health and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
In other recent news, Paramount Global has been the subject of several significant developments. Deutsche Bank (ETR:DBKGn) recently downgraded Paramount Global’s stock rating from Buy to Hold, lowering the price target to $12.00, citing reduced EBITDA estimates for 2025 to 2027. UBS maintained a Sell rating with a price target of $11.00, predicting a decline in TV affiliate numbers and challenging EBITDA comparisons due to last year’s Super Bowl revenue. Benchmark analysts upheld their Buy rating with a $19.00 target, highlighting improvements in the direct-to-consumer segment and the potential impact of an upcoming deal with Skydance.
In terms of mergers and acquisitions, PlayOn acquired MaxPreps from CBS Sports, a division of Paramount Global, aiming to integrate high school sports data with PlayOn’s services. This acquisition is expected to enhance visibility and coverage for student-athletes and fans alike. These developments come amid a challenging media landscape, with Paramount Global navigating macroeconomic factors affecting its advertising revenue. Investors and analysts are closely monitoring these changes as they may influence Paramount Global’s financial performance and strategic direction.
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