Benchmark Co. top analyst Daniel Kurnos reiterated his Buy rating on Paramount Skydance (PSKY) stock following renewed discussions around its all-cash offer for Warner Bros. Discovery (WBD). Calling the moment “WarnerMount resurfaces,” Kurnos pointed out that he had highlighted the merits of such a merger in December 2023, when he estimated significant cost synergies of around $3 billion.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Kurnos retained a $16 price target on PSKY, which implies 14.9% downside potential from current levels, given the recent run-up in the stock. Kurnos is a five-star analyst on TipRanks, ranking #929 out of 10,026 analysts tracked. He has a 53% success rate and an average return per rating of 9.20%.
Paramount-Warner Bros. Deal Economics
Kurnos pointed to the recent reports on the David Ellison-backed bid for Warner Bros. amid a consolidating media landscape. He anticipates Paramount could pay $18 per share for Warner and still have the deal be value-neutral or slightly accretive, depending on which Paramount-Skydance pro forma EBITDA is used. Since news of the proposal, PSKY stock has surged nearly 25%, while WBD has rallied more than 40%.
Kurnos noted that his prior mid-case estimate of $3.75 billion in synergies did not include recent developments such as Paramount-Skydance’s $7.7 billion UFC rights deal. Adjusted for recent activity, he estimates potential synergies could range between $3.15 billion and $4.9 billion before accounting for revenue, affiliate pricing improvements, or distribution gains. Most of these synergies come from cost cuts across TV, content, marketing, studios, and corporate expenses. The critical factors are $4.75 billion in Paramount+ content cost savings and significant DTC marketing cuts, together driving most of the potential synergies.
Kurnos emphasized that the strategic reasoning of a Paramount-Warner combination has only strengthened since first floated in 2023. He believes the transaction could reshape the competitive landscape in streaming and content, positioning the merged company as a stronger rival to Netflix (NFLX), Walt Disney (DIS), and Amazon (AMZN).
Is PSKY Stock a Buy, Hold, or Sell?
Currently, analysts prefer to remain sidelined on Paramount Skydance stock. On TipRanks, PSKY stock has a Hold consensus rating based on two Buys, nine Holds, and six Sell ratings. The average Paramount Skydance price target of $12.10 implies 35.6% downside potential from current levels. Year-to-date, PSKY stock has surged 81.2%.
Source link
:max_bytes(150000):strip_icc()/GettyImages-2213626502-271d8c0d2f414bda9aa6f9b1bf7e2153.jpg "CoreWeave Stock Pops on .3B Nvidia Deal")
