Paramount Stock Analysts React to First Earnings Under David Ellison

So far, so good. That was the tenor of Wall Street reactions to Paramount’s third-quarter earnings report, the first under the leadership of David Ellison and the entertainment company’s ownership by his Skydance Media.

In a letter to shareholders, Ellison called the direct-to-consumer, or streaming, business “our top priority,” alongside “supercharging” the company’s creative output. Ellison also said that the company was launching a “comprehensive strategic review” to determine whether to divest non-core assets, including TV giant Telefe in Argentina.

Wall Street liked what it heard in the first Paramount earnings outing under new leadership. The company’s stock was up 5 percent at $16.01 in Tuesday pre-market trading as of 8:25 a.m. ET.

Analyst: Kenneth Leon
Firm: CFRA Research
Price Target: $19
Stock Rating: “Buy”

Key Takeaway: “The direct-to-consumer (DTC) segment showed strength with revenue increasing 17 percent year-over-year to $2.2 billion, driven by Paramount+ growth of 24 percent to $1.8 billion and reaching 79.1 million global subscribers (+10 percent). DTC achieved profitability with adjusted operating income before depreciation and amortization of $235 million.”

Outlook: “We believe new management is demonstrating early operational momentum with streamlining efforts across TV media, studios, and DTC to break down silos,” he concluded. “In our opinion, operational streamlining should lead to faster and better decisions for the entire company over time.”

Analyst: Robert Fishman
Firm: MoffettNathanson
Price Target: $16
Stock Rating: “Neutral”

Key Takeaway: Fishman cautioned that “questions remain around where Paramount Skydance will identify additional cost savings without constraining growth in its first two priorities,” as well as how much money is needed for the firm’s streaming business to “truly compete with the likes of Netflix, Disney, and Amazon — all of which hold a considerable lead in global scale, content output, and engagement.”

Outlook: “Our broader questions now center on the trajectory required to achieve these longer-term goals — and how they may evolve alongside changes in the company’s spending allocation and potential structural shifts within its portfolio. More specifically, we continue to believe that a bid for Warner Bros. Discovery remains a logical next step for the company, one that could meaningfully alter its current trajectory.”

Analyst: Daniel Kurnos
Firm: Benchmark
Price Target: $19
Stock Rating: “Buy”

Key Takeaway: “There was a lot to unpack in new CEO David Ellison’s first public appearance, including positive DTC OIBDA for 2025, planned price hikes, incremental investment in original content, tech platform consolidation, and incremental efficiencies, but the tone was clear – Paramount Skydance has no intention of saving their way to prosperity, although they believe they can drive substantial margin improvement along the way, all leading to enhanced shareholder value.”

Outlook: Kurnos acknowledged that not everyone will be convinced at this stage. “We doubt the skeptics will be swayed by this initial print,” the analyst said. “However, we have to imagine that the initial guidance has to be something management feels they should have no problem achieving. … The wildcard, of course, remains major media M&A, which is no longer as priced into the stock as it was a month ago and which we think still has a reasonable chance of occurring.”

Analyst: Michael Morris
Firm: Guggenheim
Price Target: N/A
Stock Rating: “Neutral”

Key Takeaway: “PSKY is running a very similar playbook to that of Warner Bros. post the Discovery combination in 2022, where optimism and increased synergies yield lower financial estimates. We believe that Paramount Skydance could be different from prior media industry combinations. But lowering initial profit guidance by 12% (versus the $4.1bn 2026 OIBDA outlook provided in July 2024) due to content acquisitions, despite raising run-rate synergy estimates by $1bn gives us media merger déjà vu.”

Outlook: “If Paramount Skydance does not make a transformative acquisition, we believe significant questions remain, including “how will content production increase while reducing headcount-driven costs?”, “is UFC viewership sufficient to stabilize subscription trends relative to 20-30mm NFL viewers?”, and how does Paramount become “the industry’s most technologically capable media company?” when competing against Netflix, YouTube and Amazon among others. We expect new management will make progress toward goals and improve upon the condition of the company under previous ownership.”

Analyst: Jessica Reif Ehrlich
Firm: Bank of America
Price Target: $13
Stock Rating: “Underperform”

Key Takeaway: “We believe PSKY has the potential to be a dynamic global media company. However, there are no easy fixes and a turnaround such as this will take a significant amount of time, require substantial investment and investor patience.”

Outlook: “On a consolidated basis, results were largely mixed although streaming profitability was ahead of our forecast (not perfectly comparable to our forecast due to reporting changes). More importantly, the company provided a 2026 outlook, which calls for revenue of $30bn and adjusted OIBDA of $3.5bn (which was above our $3.1bn forecast) driven in large part by the increase in run-rate synergies (~$2.5bn by end of ’26; $3bn in total). All said, it is clear PSKY has a very strong management team and there will be upward estimate revisions post results. However, there are still many unknowns on the strategic initiatives the company has undertaken and, as evidenced by prior large combinations, restructurings often take years to implement.”