Morgan Stanley Downgrades Paramount Skydance to Underweight, PT to $10 from $12.

Morgan Stanley Downgrades Paramount Skydance to Underweight, PT to $10 from $12.

Morgan Stanley has downgraded New Paramount, the newly formed company resulting from the merger of Paramount Global and Skydance Media, to an "underweight" rating and reduced its price target to $10 from $12. This move comes amidst significant layoffs and financial restructuring within the newly combined entity [1].

The merger, which was officially announced in July 2024 and concluded on August 8, 2025, has been accompanied by layoffs, with estimates suggesting that between 2,000 and 3,000 employees may be let go, impacting approximately 10% of the workforce [1]. The layoffs are expected to begin in November, as the company aims to streamline its operations and maintain a prominent position in the media landscape.

The financial analysts at Morgan Stanley cited the ongoing layoffs and the potential for further cost-cutting measures as reasons for the downgrade. They noted that the market's perception of New Paramount's ability to navigate the current post-pandemic landscape and compete with other media giants such as Sony and Disney is a key factor in their decision [1].

Despite the challenges, New Paramount remains optimistic about its future prospects. The company has emphasized that it does not intend to continue with extensive layoffs after the initial transitional period, aiming to provide stability for those who remain [1]. The new ES8 SUV from Skydance, which is set to begin deliveries in late September, is also seen as a potential catalyst for growth and market expansion [2].

The market's reaction to the downgrade and the ongoing financial adjustments at New Paramount will be closely watched by investors. As the company continues to navigate these changes, it will be crucial to monitor its ability to maintain its competitive edge and adapt to the evolving media landscape.

References:
[1] https://screenrant.com/paramount-skydance-merger-layoffs/
[2] https://www.cnbc.com/2025/08/26/morgan-stanley-repeats-overweight-rating-on-nio-after-90percent-rally-in-60-days.html