Analyst Predicts Paramount’s Target Price Cut on ‘More Modest’ Streaming and Ad Growth

Analyst Predicts Paramount’s Target Price Cut on ‘More Modest’ Streaming and Ad Growth

Guggenheim analyst Michael Morris maintains a “buy” rating on Paramount Global but has also lowered its share price target, predicting a slowdown in streaming subscriber revenue and ad sales for the entertainment conglomerate.

The Hollywood studio, which has attracted investor attention since billionaire investor Warren Buffett bought Paramount Global in May, faces “a more modest pace of direct-to-consumer advertising trends expectations,” Morris said in a note to investors. fell in second place. quarterly earnings expectations.

Paramount Global’s Film Division Raises Tom Cruise’s Performance Ratings Top Gun: Maverick In the statement, the Guggenheim’s forecast of slower growth in streaming subscriber subscriptions and ad sales is contradictory as the studio seeks budget and premium customers with its free and ad-supported Pluto TV streamer and platform. -Vision.

“We reduced our 2Q advertising prospects for the TV and DTC (Direct-To-Consumer) media segments, reflecting increasing market weakness,” Morris said as the Guggenheim lowered its Paramount Global price target to $35.00 of US$ 40.00. Other Wall Street watchers also note that advertising budgets are likely to shrink as marketers try to cut costs amid the threat of recession to the national economy.

In mid-February, the Guggenheim cut its price target on ViacomCBS, then called ViacomCBS, to $40.00 from $53.00, maintaining a buy rating after the studio changed its name to Paramount Global and signaled that planned to move to streaming.

Morris’ latest estimate for Paramount+ subscriber growth was reduced to 4.1 million from 4.5 million net additions. “Our revised DTC subscriber pacing… better reflects headwinds due to outages in Russia (-3mm network additions) as well as gradual declines in non-Paramount+ services,” a Guggenheim analyst told Paramount Global about their latest model.

Elsewhere on Wall Street, Bank of America’s Jessica Reif Ehrlich rated Paramount as “neutral” in a report dated June 2, while analysts at MoffettNathanson had a “neutral” rating for the company with a price target. $30 from May 2.

Shares in the study, which will release second-quarter results Aug. 4, rose 37 cents, or 1.5 percent, to 24.82 early Wednesday.

Source: Hollywood Reporter

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