Neha Gupta
2 min read
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JPMorgan analyst David Karnovsky cut Paramount Global's (NASDAQ:PARA) price target from $11 to $10 on May 21 and maintained an Underweight rating.
The downgrade follows concerns about continued advertising revenue declines and expected streaming losses through 2026. Karnovsky reduced his fiscal 2025 consolidated OIBDA forecast to $2.81 billion, down 9.9% from his previous estimate. The analyst cited deteriorating TV Media performance, with second-quarter advertising revenue now projected at $1.62 billion, a 6.5% decline versus his prior 5.0% drop estimate. He expects the advertising downturn to worsen in the third and fourth quarters.
The Lobby Entertainment Network digital displays showing dynamic and visually engaging advertisements.
The streaming division continues burning cash despite subscriber growth. While Paramount+ added 1.5 million subscribers in Q1 to reach 79 million globally, Karnovsky expects Direct-to-Consumer (DTC) losses to persist through 2026. He reduced his fiscal 2025 DTC advertising estimate to $2.06 billion after first-quarter misses, though he raised subscription revenue projections to $6.46 billion.
Paramount's challenges stem from ongoing PayTV declines and macro uncertainty affecting the broader media landscape. The company’s Q1 2025 revenue dropped by 6% year-over-year to $7.19 billion. Excluding Super Bowl comparisons, revenue actually grew 2%. DTC adjusted OIBDA improved $177 million year-over-year, showing progress toward profitability.
Paramount Global (NASDAQ:PARA) is an American multinational mass media and entertainment conglomerate. It owns Paramount Pictures, CBS Entertainment Group, Paramount Media Networks, and Paramount Streaming, and operates over 170 networks that reach viewers in 180 countries.
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