PSKY Stock Forecast & Price Target

Paramount Global's diverse business segments, including TV media, filmed entertainment, and direct-to-consumer offerings, are poised for substantial growth, particularly in the linear sports sector, which is expected to remain a strong driver of revenues. The anticipated improvements in direct-to-consumer growth, operational synergies, and overall advertising market conditions indicate the potential for above-consensus performance metrics. Additionally, new leadership is expected to rejuvenate the company's content production capabilities and enhance technological efficiencies, further supporting a positive financial trajectory.

Paramount Skydance is experiencing significant financial challenges, as evidenced by a staggering 41% decline in subscription, advertising, and licensing revenue amounting to $2.4 billion since 2021, despite previous growth driven by sports-related retransmission fees. The firm faces additional risks linked to a secular shift away from traditional broadcast TV, which is negatively impacting advertising revenue, as well as cyclical volatility in the advertising market and the unpredictable nature of feature film profits. Given these concerns, there is an expressed belief that management may be underestimating the risks associated with driving direct-to-consumer growth while maintaining traditional linear economics, leading to a downgrade in outlook.