Why Is Wall Street Turning Bearish on Paramount Stock Ahead of Earnings?
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According to the TipRanks Stock Forecast page, the company is expected to post adjusted earnings per share (EPS) of $0.34 on revenue of $6.87 billion for the second quarter of fiscal 2025. This represents a decline from PARA's Q2FY24 EPS figure of $0.54, while revenue is expected to remain similar at $6.81 billion.
Analysts Have a Moderate Sell Rating on PARA Stock
Notably, PARA stock has outperformed the broader index, gaining nearly 22% so far in 2025, while the S&P 500 (SPX) index has gained only 6.4%. Despite this strong performance, analysts remain uncertain about Paramount's growth prospects going forward. Let's briefly review a few of their perspectives.
Loop Capital's Alan Gould has a Sell rating and a $10 price target on PARA, which implies 21.6% downside potential. Gould is highly skeptical about Paramount's long-pending merger with Skydance Media. He stated that the original forecast provided earlier is 'overly optimistic' and should no longer be considered because it is now a year old.
Meanwhile, UBS analyst John Hodulik also maintains a Sell rating on PARA and has a $10 price target. He has adjusted Paramount's model estimates to reflect the disappointing box office performance of the latest Mission: Impossible release and consumers' shifting preferences from traditional TV to online streaming.
At the same time, Barclays analyst Kannan Venkateshwar has a Sell rating and a $12 price target on PARA stock, while Wells Fargo's Steven Cahall has a Hold rating and a $12 price target, implying 5.9% downside.
Is Paramount Stock a Buy, Hold, or Sell?
Overall, Paramount Global is facing several headwinds, including declining revenue and advertising dollars, diminishing profitability, and operational inefficiencies. While the ongoing lawsuit with President Donald Trump was settled last month with a $16 million fine, the merger with Skydance remains under review by the Federal Communications Commission (FCC) for final clearance.
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