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Investing.com - Loop Capital has reiterated its Sell rating and $10.00 price target on Paramount Global (NASDAQ:PARA), expressing skepticism about the company’s merger with Skydance. The stock currently trades at $12.53, near its 52-week high of $13.29, after posting a strong year-to-date return of 20.81%.
The investment firm views Skydance’s pro forma 2026 OIBDA projection of $4.1 billion as "overly optimistic" and estimates a more realistic range of $3.3-$3.5 billion, absent aggressive accounting maneuvers. Loop Capital notes that the guidance provided in the merger transaction call is now a year old. While the company’s current EBITDA stands at $2.62 billion, InvestingPro data shows analysts expect a return to profitability in 2025.
Loop Capital’s forecast falls below consensus for legacy Paramount, particularly due to weaker expectations for affiliate revenue and entertainment profitability. The firm has adopted the more conservative standalone Skydance outlook provided by Paramount’s special committee.
While Skydance cited $2 billion in cost efficiencies, Loop Capital believes a significant portion of the first $1 billion appears already captured through Paramount’s two rounds of layoffs, with $640-$680 million of expected savings.
The $10 price target is based on a blended valuation approach, applying a 6.0x multiple with a modest discount for time and execution risk, as structural headwinds in linear media, continued affiliate revenue erosion, and uncertainty around deal timing and integration further constrain Loop Capital’s outlook. For deeper insights into Paramount’s valuation and financial health metrics, access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Paramount Global has announced a quarterly cash dividend of $0.05 per share for its Class A and Class B Common Stock, with payment scheduled for July 1, 2025. The company has also renewed its distribution agreements with Mediacom, ensuring continued access to its broadcast, entertainment, news, and sports networks across Mediacom markets. In terms of analyst ratings, UBS has reiterated a Sell rating on Paramount Global, citing weaker box office performance and adjusting its revenue forecast for the second quarter to flat growth. Conversely, Guggenheim has maintained a Buy rating, despite lowering its second-quarter Filmed Entertainment revenue forecast due to the underperformance of the latest Mission: Impossible film. Guggenheim noted that this decline is offset by better-than-expected profitability in Paramount’s TV Media and Direct-to-Consumer segments. Paramount Global recently settled a lawsuit filed by former U.S. President Donald Trump, agreeing to pay $16 million over allegations related to a "60 Minutes" interview. This settlement has drawn criticism from CBS News staff and press freedom advocates. These developments reflect Paramount’s ongoing efforts to navigate challenges in the media landscape while maintaining strategic partnerships and shareholder value.
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