Top Wall Street analysts have issued a “Sell” rating on Paramount Skydance stock (PSKY), despite the completion of the highly anticipated merger between the two companies. Morgan Stanley analyst Benjamin Swinburne reiterated his Sell rating on PSKY and lowered the price target from $12 to $10, implying a massive 31.9% downside potential from current levels.
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Similarly, Bernstein analyst Laurent Yoon maintained a Sell rating and an $11 price target on PSKY stock, which implies 25.1% downside potential.
Why Are Analysts Bearish on PSKY Stock?
Swinburne’s new price target of $10 incorporates updated forecasts following the Skydance merger, which included the $15 per-share cash tender for partial holdings. Moreover, Swinburne’s model now assumes a pro forma FY26 adjusted OIBDA of $3.1B, factoring in the recently announced $7.7 billion UFC streaming rights agreement with TKO Group (TKO).
At the same time, Yoon has been skeptical about the merged company’s future prospects, especially its ability to stabilize and grow, since it would not be significantly larger or more competitive in the streaming landscape. Yoon sees more potential and financial stability in rivals Walt Disney (DIS) and Netflix (NFLX), and has assigned Buy ratings to their stocks.
Earlier, Guggenheim analyst Michael Morris had downgraded PSKY stock from a Buy rating to a Hold, citing a “significant” run in its share price. Notably, PSKY stock has surged over 45% since August 12. Morris noted that Paramount Skydance’s valuation has outpaced its fundamentals.
Overall, analysts remain bearish on Paramount Skydance stock due to uncertainty about the merged company’s future prospects and the recent surge in its share price.
Is PSKY a Good Stock to Buy?
On TipRanks, PSKY stock has a Moderate Sell consensus rating based on one Buy, eight Holds, and five Sell ratings. The average Paramount Skydance price target of $11.30 implies 23.1% downside potential from current levels.
