Paramount Gets Double Downgrade From Goldman Sachs, Disney Price Target Slashed By 12%

  • Goldman Sachs analyst Brett Feldman cut linear TV advertising revenue forecasts across media coverage to reflect the potential economic slowdown.
  • The revisions influenced price target cuts for AMC Networks Inc AMCXWalt Disney Co DISFox Corp FOXA, and Paramount Global PARA
  • Feldman double downgraded Paramount to Sell from Buy with a price target of $20, down from $37. 
  • Macro headwinds are likely to intensify pressures on Paramount's EBITDA and free cash flow through at least 2023, which increases the risk that the company will be able to execute its streaming strategy in a market that is already seeing intensified competition, Feldman contended.
  • He cut Disney's price target from $148 to $130 and reiterated a Buy.
  • He cut FY2024 Disney+ subscriber estimate primarily to reflect the loss of the IPL streaming rights but largely maintained his estimates for core Disney+ subscribers ahead of several key proof points during 3Q22-Q124. 
  • He maintained his 3Q22 Disney+ net adds estimate. 
  • Feldman reinstated coverage of Warner Bros Discovery WBD with a Buy rating and a $22 price target. 
  • The merger of Discovery and WarnerMedia positioned Warner Bros to achieve "material scale as a global streamer while also fortifying its linear networks business and driving significant cost synergies," Feldman claimed.
  • He saw the risks of complex merger integration, inflation, and cyclic pressures on linear ad revenue priced in the stock price.
  • Price Action: PARA shares traded lower by 4.40% at $24.23 on the last check Tuesday.
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