Here’s what Wall St. experts are saying about these media names ahead of results

Comcast (CMCSA) is scheduled to announce quarterly results on January 25, while Warner Bros. Discovery (WBD) and Paramount (PARA) are expected to report earnings on February 22 and 28, respectively. What to watch for:

Click here to check out Warner Bros. Discover’s recent Media Buzz Sentiment as measured by TipRanks.

NEUTRAL INTO Q4 EARNINGS: Earlier this month, Scotiabank raised the firm’s price target on Comcast to $51.25 from $49, while keeping a Sector Perform rating on the shares. The firm is neutral into the Q4 earnings reports for the U.S. telecom names. The firm increased its target price after adjusting cost of debt to reflect the lower term structure for corporate bonds since Q3. It continues to favor names with higher exposure to wireless versus wireline while also focusing on companies with expanding free cash flow growth outlooks.

WILL THEY, WON’T THEY: MoffettNathanson upgraded Paramount to Neutral from Sell with a $13 price target. The “will they, won’t they” story of Warner Bros. Discovery, Paramount and Comcast “has captivated,” says the firm, with consensus seeming certain that the media assets of at least two of these three companies “will emerge out of 2024 hitched together in one way or another.” What form these three companies come to hold on the other side of this process is “anyone’s guess,” but no matter which way a deal ends up being cut, “this will not be a glitzy romance” as the table is set “not by excitement but by desperation of the parties involved,” MoffettNathanson adds.

Meanwhile, Redburn Atlantic also downgraded Paramount to Sell from Neutral with a price target of $11, down from $17. Linear advertising is at a “negative tipping point” and consensus estimates do not adequately forecast declines across the media group, the analyst tells investors in a research note. The firm sees the most downside at Paramount, which it downgraded to Sell, with material downside at Warner Bros. Discovery, which it downgraded to Neutral. Redburn’s analysis also underlines the potential for downside to Disney (DIS) consensus and reinforces a Sell rating, says Redburn.

MERGER RUMORS: Late last month, Axios reported that Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish to discuss a possible merger. The news was followed by another report by The Wall Street Journal saying that no formal talks between the two companies are currently under way.

Commenting on the reports, Barclays said at the time that any potential deal, should one emerge, is “more likely about buying time through cost synergies” and for Warner management to run a bigger portfolio for a bit longer. However, “combining two of the most challenged assets across legacy media is unlikely to somehow transform the combination into a better company,” the firm told investors. The more players Paramount engages with, “the narrower its path may end up being in the absence of real progress,” added Barclays.

Meanwhile, Wells Fargo said that while it does not know the structure for a potential Warner Bros. Discovery + Paramount combo, it prefers Warner Bros. Discovery as standalone. The firm also said it thinks Warner Bros. is better off as a seller than buyer given the strength and uniqueness of Warner Bros. and HBO, but management may have different ideas. Any deals will likely require significant regulatory approvals of 1-2 years. Perhaps the biggest conclusion is that Media’s challenges inevitably lead to rationalizations, Wells adds.