Citi has downgraded Paramount Global (NASDAQ: PARA) from “Buy” to “Neutral,” adjusting its price target from $13 to $12. This move signals a more cautious stance amid ongoing strategic shifts and the pending Skydance Media transaction.
🌀 Merger-Related Volatility: The potential structure of the Skydance deal, particularly the substantial cash payment option of around $7 per share, has raised concerns. Citi expects increased equity volatility driven by event-driven funds once the transaction closes.
🔁 Strategic Uncertainty: While the merger could unlock major strategic changes – like selling linear cable assets to Versant (Comcast’s spin-off) or possibly offloading Paramount+—these developments are still speculative. Citi doesn’t see enough clarity to justify a bullish outlook at this stage.
📺 Streaming Pressure: Paramount continues to face stiff competition in the streaming world. Though consolidation might offer a path forward, the timing and outcome remain cloudy, keeping the stock in a wait-and-see zone for now.
💸 Dividend Fundamentals: PARA maintains a dividend yield around 4.98%, with a $0.60 annual payout per share. Despite the high yield, investors should stay alert. The company’s cash-intensive streaming investments and unpredictable earnings could impact future dividend reliability.