When it comes to covering broadcast media companies as a financial analyst, Jessica Reif Ehrlich (née Cohen) has established herself as perhaps the Helen Thomas of Wall Street, emerging as the most prominent veteran focused on both Radio and Television. Today at Bank of America Securities, Ehrlich has initiated coverage on Paramount Skydance Corp.
Investors will hardly be excited over Ehrlich’s initial analysis, which points to a long, slow growth trajectory for the company led by David Ellison.
Ehrlich gave “PSKY” an Underperform rating, while offering a 1-year target price of $11.
But, that rating is in line with the consensus, as noted by Benzinga. Meanwhile, the consensus price target is $10.50, with the range presently between $8 and $13.
Paramount Skydance shares were trading at $15.05 as of 2:55pm Eastern on Friday.
In an investor note, Ehrlichthat although Paramount Skydance holds the power to transform the company into a global media superpower, such a goal will likely take years and require significant expenses. This, in turn, would result in the need for increased patience from shareholders.
Making the long-term outlook cloudy for Paramount Skydance is the current state of fiscal affairs at Warner Bros. Discovery. Under David Zaslav, WBD has been under an intense microscope from Wall Street and Hollywood. A profile in The New York Times Magazine sought to offer a balanced portrait of the efforts Zaslav has been making to transform an industry that has seen most major productions shift from California to locales ranging from Canada, and the states of New York and Georgia. Yet, Warner Bros. is on track to enjoy a strong Q3 at the box office as HBO is in the midst of a rebrand — including adding the HBO brand back to the Max OTT platform.
Like WBD, Paramount Skydance is on a trajectory that is similar in that it is complex, and will require some restructuring. Cost-cutting by Paramount under Redstone family control could also play a long-term role in any rebound. The key, says Ehrlich, is maximizing the synergies between Skydance and Paramount’s feature film studios, the CBS network and station assets and associated digital platforms, and the sports relationships it maintains with big leagues including the NFL.
Should pro football break from CBS and go elsewhere, the ramifications could be severe.
Ehrlich’s report took note of a $2 billion cost savings target at Paramount Skydance, and believes this could assist in offsetting heavy content spending. The target is achievable, she believes, but warns that rising costs for program rights and streaming profitability concerns remain short-term worries.
For 2026, Ehrlich predicts Paramount Skydance’s EBITDA will come in at $3.06 billion.
That’s nearly $1 billion below the $4.1 billion estimate offered by the company. Why? Ehrlich points to a $750 million UFC rights deal as a huge expense that can only be offset to a limited extent by paid Paramount+ subscriber growth and advertising dollar increases.
With digital platforms the center of attention for marketers and consumers, getting Paramount+ into the black is of absolute importance, Ehrlich concludes. But, doing so will require an increase in content spending, bundling opportunities for consumers or, potentially, a merger with another underperforming OTT platform.
