Paramount Is 'Impaired By Streaming Losses,' Analyst Says In 2nd Downgrade Note

While Paramount Global’s PARA stock trades at a premium multiple, the DTC (direct-to-consumer) environment remains uncertain, according to Wells Fargo.

The Paramount Global Analyst: Steven Cahall downgraded the rating for Paramount Global from Equal-Weight to Underweight, while reducing the price target from $19 to $13.

The Paramount Global Thesis: As much as 30% of Paramount Global’s TVM ad revenues are at risk from a shift to ad-based video on demand (AVOD) in the longer term and the company’s EBITDA is “impaired by streaming losses,” Cahall said in the downgrade note. These factors lend significant downside to the current estimates, he added.

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“Late last week NBCU forecast a tougher period ahead for linear media businesses,” the analyst further wrote.

“We do see opportunities for PARA to unlock value, but don't think they're currently under consideration,” he stated.

PARA Price Action: Shares of Paramount Global had declined by 3.05% to $18.44 in premarket trading on Monday.

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