Paramount‘s second quarterly earnings report under the leadership of CEO David Ellison is in, but Wall Street attention remains focused on the company’s attempts to acquire Warner Bros. Discovery, in a showdown with Netflix, via a sweetened bid.
Ellison highlighted in a letter to shareholders after the Wednesday market close that he and his team see the potential mega-deal as a key strategic focus. “While we are confident in our standalone strategy and growth trajectory for Paramount, we view WBD as an accelerant to achieving these goals more quickly,” he highlighted.
Wall Street analysts on Thursday started dissecting Paramount’s results and latest management commentary. Here is The Hollywood Reporter‘s look at their takeaways.
Analyst: Michael Morris, Guggenheim
Stock rating and price target: neutral, $16, down $5
Key takeaways: “Early Skydance playbook on track,” Morris highlighted in the headline of his report, noting that results were “largely in line” with management guidance. And he shared this takeaway: “Strong cost discipline at TV Media offset weaker than forecast operating income before depreciation and amortization at direct-to-consumer/film.”
The analyst said he cut his price target by $5 after applying a lower earnings multiple, which he noted was “in line with the current media peer group average, which has also declined.” And Morris noted: “We believe that the outcome of bidding for WBD will continue to impact investor sentiment on Paramount shares, with concern toward a potentially higher bid and/or failure to win the asset as overhangs on investor confidence during the bid process.”
The Guggenheim analyst’s conclusion: “While we view a WBD combination as potentially transformational, significant execution and regulatory hurdles remain.”
Analyst: Laurent Yoon, Bernstein
Stock rating and price target: underperform, $12
Key takeaways: “TV Media declined 9 percent in fiscal year ’25, Filmed Entertainment was down 5 percent, but direct-to-consumer (DTC) grew 12 percent, driven by subscription revenue,” Yoon summarized in his report. “Consistent with industry trends, TV Media will continue to face headwinds, and the company’s growth will rely primarily on DTC, with some support from Filmed Entertainment. … DTC still has a long road, but progress is visible.”
The analyst put that into the broader M&A context, concluding: “It’s a tough setup, and the headline numbers underscore the challenges ahead and the urgency of accelerating DTC growth – hence the pursuit of WBD.”
Yoon also highlighted what he called the “NFL overhang” for the stock. “The NFL renegotiation continues to be a thorny issue for Paramount and peers,” he explained. “Although the topic received limited attention in the [earnings] call – given ongoing uncertainty around timing, package, and participants – we anticipate a potential material step-up in costs to remain an overhang throughout the year. It does not appear that anyone will emerge from the process unscathed.”
Analyst: Doug Creutz, TD Cowen
Stock rating and price target: hold, $13, down $2
Key takeaways: After the earnings update, Creutz’s key takeaway for the company’s financial outlook was simple: “Management reiterated prior 2026 guidance, with improving profitability for DTC, a return to profitability at studios, and stable linear contributions, helped by cost cutting.” The analyst kept his 2026 revenue estimate unchanged, but raised his earnings per share forecast for the year from 62 cents to 71 cents, while cutting his stock price target.
He also highlighted the continued investor deal focus in the title of his report: “Management maintains outlook for 2026 while we wait on WBD outcome.”
Creutz summarized his investment view this way: “Paramount Skydance has some attractive video content assets, including the most-viewed network in the United States. We believe the company has enough high-quality content to continue to survive in an increasingly challenging video content ecosystem. New management’s plan to invest aggressively in content offers the chance for meaningful upside if the company can grow share, but could also accelerate problems if new projects fail to capture sufficient audience attention.”
Analyst: Robert Fishman, MoffettNathanson
Stock rating and price target: neutral, $14
Key takeaways: It may have been earnings time for Paramount, but Fishman highlighted that “investor focus remains on what comes next with the company’s revised bid” for WBD. “The key question is whether Paramount’s revised bid is truly ‘best and final,’ or whether further back-and-forth lies ahead before WBD’s fate is decided.”
The analyst also shared his take on the company’s studio segment outlook: “Without a marquee blockbuster comparable to last year’s Mission Impossible: The Final Reckoning, the segment theatrical revenue is set to be down but offset by Skydance revenue consolidation and higher licensing revenues.”
Plus, Fishman addressed “softness” at Paramount’s advertising-supported streaming service Pluto TV, “with weaker monetization despite growing monthly average users.” He expects the company “to right-size the platform over the course of the year as engagement grows and older content libraries continue to be added.” But he emphasized: “The bigger question is how effectively the company can integrate its DTC offerings more holistically – for example, leveraging Pluto TV as an entry point for future Paramount+ subscribers.”
