Paramount Skydance: Limited Standalone Upside and Execution Risks Justify Sell Rating and Lowered $11 Price Target

Morgan Stanley analyst Thomas Yeh has maintained their bearish stance on PSKY stock, giving a Sell rating yesterday.

Thomas Yeh has given his Sell rating due to a combination of factors tied to Paramount Skydance’s limited standalone upside and execution risks. He keeps 2026 revenue and EBITDA forecasts aligned with management’s guidance, but emphasizes that free cash flow expectations are unchanged, which constrains valuation if the Warner Bros. Discovery transaction does not materialize or deliver anticipated benefits.

He also points out that, although streaming and studio operations should improve through stronger direct-to-consumer growth, better licensing, and cost synergies, these improvements are already largely reflected in the share price. Yeh lowers his price target to $11, using a forward EBITDA multiple that still exceeds traditional TV peers, underscoring concern that the stock’s premium valuation is vulnerable if free cash flow ramp in 2027–2028 falls short or merger accretion is delayed.

Yeh covers the Communication Services sector, focusing on stocks such as AMC Networks, New York Times, and Omnicom Group. According to TipRanks, Yeh has an average return of -8.5% and a 38.30% success rate on recommended stocks.

In another report released yesterday, UBS also maintained a Sell rating on the stock with a $12.00 price target.