Paramount Skydance’s Q4 earnings were better than expected, but analysts cut their price targets because they weren’t sure about the company’s aggressive bid for Warner Bros. Discovery (WBD).
Paramount’s TV Media revenue fell 9% from the previous year, but Direct-to-Consumer (DTC) revenue rose 12% thanks to subscriptions. Overall, the company showed cost discipline that made up for weaker parts. Wall Street liked that DTC was growing, but they gave it lower multiples that were more in line with other media companies. This led to cuts like $5 off targets. One analyst raised the EPS forecast for 2026 to 71 cents and lowered the price target.
Laurent Yoon of Bernstein gave it an Underperform rating at $12 because of the risks involved in the WBD deal. MoffettNathanson kept its rating at Neutral at $14, saying that investors were more interested in the results of the bids than the company’s earnings. These moves show that people are worried about higher bids or deals not going through affecting sentiment.
WBD Acquisition Drama Paramount, led by CEO David Ellison, raised its WBD offer to $31 per share and added a $7B regulatory termination fee to compete with Netflix. Ellison sees the merger as a way to speed up strategy, but there are big problems with regulations and integration. WBD is still talking while keeping its deal with Netflix.
