PSKY Stock Forecast & Price Target

Paramount Skydance is supported by a clearer path to close the WBD transaction, with the settlement avoiding structural remedies, preserving the earnings base, and leaving intact the prospect for $6B+ in cost synergies on a cost base where that target is only ~11% of combined costs. Its operating backdrop is also improving, as 1Q26 revenue of $7.35B and adj. EBITDA of $1.16B beat expectations, while DTC turned profitable at $251M of adj. EBITDA with 17% revenue growth, 14% ARPU expansion, and ~2M underlying subscriber adds. The firm’s content engine remains strategically valuable, with TV Media margins expanding to 29%, Studios EBITDA doubling to $164M, and a planned doubling of film output to 16 titles in 2026 that should deepen the library, support licensing, and reinforce streaming engagement.

Paramount Skydance is burdened by a highly levered balance sheet, with $79B of pro forma net debt and a stated path to ~3x leverage within three years dependent on synergy delivery, leaving limited financial flexibility if execution slips. The investment case also faces operational strain from regulatory and integration obligations, including 30 theatrical films annually in years 1–2 rising to 32 in years 3–5, where missing targets triggers $30M per-film penalties and possible asset divestitures, while the combined streaming platform may remain subscale and face margin pressure as content spending rises in Q3/Q4. Although DTC improved to $251M adjusted EBITDA on a 10% margin, affiliate revenue is expected to decline with subscriber losses and TV advertising weakness persists, making the reaffirmed $30B revenue and $3.8B adjusted EBITDA outlook vulnerable to execution risk.