Guggenheim’s top analyst, Michael Morris, remains highly bullish on the long-term trajectory of Paramount Global’s stock (PARA), despite the box office flop of Mission: Impossible – The Final Reckoning. Morris reiterated his Buy rating on PARA and maintained his price target at $14, implying 8.5% upside potential from current levels.
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Morris has been a long-time bull on Paramount stock. The five-star analyst ranks #468 out of 9,653 analysts ranked on TipRanks. He boasts a 57% success rate and an average return per rating of 15.40%. To date, Morris’ best rating was his Buy recommendation on PARA stock between April 2, 2020, and April 2, 2021, when he earned a gigantic return of 259.7%.
Why Is Guggenheim Bullish on PARA Stock?
Morris adjusted his model estimates to reflect the film’s underperformance at the box office. He lowered the second-quarter revenue forecast for the Filmed Entertainment segment due to the weaker-than-expected results of the latest Mission: Impossible release.
Nonetheless, the firm’s overall Q2 operating income before depreciation and amortization (OIBDA) remained unchanged at $757 million. Morris noted that the lower revenue from films was offset by the better-than-feared performance in Paramount’s TV Media and Direct-to-Consumer (DTC) segments.
Moreover, the analyst lifted Paramount’s full year fiscal 2025 overall OIBDA estimate to $2.79 billion from $2.75 billion. Morris attributed the increase to Paramount’s continued improvement in the DTC unit and cost efficiencies resulting from recent layoffs. Meanwhile, he marginally reduced his 2026 OIBDA forecast to $2.88 billion from $2.91 billion, mainly due to continued changes in consumers’ TV viewing habits, including cord cutting.
The entertainment giant is facing company-specific and industry-wide headwinds, impacting both its financial and share price performance. At the same time, the company awaits the FCC’s approval for its long-pending merger with Skydance Media. Also, the company is set to hold its annual shareholder meeting on Wednesday, July 3, where shareholders are expected to vote on the renewed board. Proxy advisory firm ISS has urged them not to re-elect key board members, including majority holder, Shari Redstone.
Is Paramount Global a Good Investment?
Analysts currently prefer to remain on the sidelines on Paramount Global due to ongoing challenges. On TipRanks, PARA stock has a Hold consensus rating based on two Buys, eight Holds, and five Sell ratings. Also, the average Paramount Global price target of $12.08 implies 6.4% downside potential from current levels. Year-to-date, PARA stock has gained 24.4%.
