Paramount Skydance, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst John Hodulik from UBS maintained a Sell rating on the stock and has a $12.00 price target.
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John Hodulik has given his Sell rating due to a combination of factors impacting Paramount Skydance’s financial outlook. Despite an increase in EBITDA estimates, the company’s free cash flow projections have been lowered, reflecting greater investment needs. The mixed results, with revenues falling short while EBITDA exceeded expectations, highlight challenges in the TV Media segment, which saw a decline in EBITDA and affiliate revenues.
Management’s guidance indicates a reduction in expected EBITDA for 2026 due to higher content spending, and while synergies are anticipated, the free cash flow conversion remains low. The aggressive cost-cutting measures and increased investment in content, alongside a decline in advertising revenues, suggest potential risks. These factors, combined with the cyclical sensitivity of the TV segment and the substantial integration costs, contribute to the cautious outlook and the Sell rating.
Hodulik covers the Communication Services sector, focusing on stocks such as Paramount Skydance, Charter Communications, and Fox. According to TipRanks, Hodulik has an average return of 10.5% and a 64.55% success rate on recommended stocks.
In another report released today, Barclays also maintained a Sell rating on the stock with a $8.00 price target.