A veteran Wall Street analyst is expressing caution over growth opportunities involving Paramount following its merger with Skydance Media in August.
On Friday, Jessica Reif Ehrlich of Bank of America Securities gave Paramount an “Underperform” rating and a one-year price target of $11 a share.
In a note to investors, Ehrlich said the company holds the potential to transform into a global media powerhouse, but cautioned that the path to that goal will take years and require heavy investment. She noted that shareholders will need to demonstrate patience as the company balances spending on programming rights with efforts to restructure and cut costs.
Ehrlich highlighted a $2 billion cost-savings target as achievable, but warned that rising programming costs and lingering questions over streaming profitability are near-term challenges.
Paramount has extensive exposure across feature films, CBS broadcast assets, digital platforms and major sports rights, including the NFL. Ehrlich noted the company’s reliance on pro football as a key factor, warning that losing those rights would have significant consequences. (The NFL’s current rights agreement with TV broadcasters, including CBS, runs through 2032, but the league may execute a clause in its contract that allows it to renegotiate TV rights as soon as 2029.)
Ehrlich added that Paramount Plus remains a critical component of the company’s long-term strategy. While growth in digital platforms is a priority for marketers and consumers, turning Paramount Plus profitable will require further investment, bundled offerings or possibly a merger with another underperforming streaming service.
Ehrlich’s assessment comes as other major media companies, including Warner Bros Discovery, continue restructuring efforts to stabilize balance sheets while competing in a changing entertainment marketplace. Like its rivals, Paramount is balancing cost reductions with content spending as it seeks to build scale in streaming and strengthen its position in sports and broadcast television.
The rating assigned by Bank of America Securities aligns with broader market sentiment. Data from Benzinga shows the consensus price target is $10.50, with estimates ranging between $8 and $13. Paramount stock closed around $15 per share on Friday.
The analyst projects Paramount 2026 Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) at $3.06 billion, well below the company’s own forecast of $4.1 billion. She attributed the gap in part to a $750 million rights deal with UFC, which she described as a substantial expense unlikely to be fully offset by subscriber growth or advertising gains.
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