Paramount Skydance:Guggenheim initiates coverage, recommends Buy with PT of $13.

Paramount Skydance:Guggenheim initiates coverage, recommends Buy with PT of $13.

Guggenheim Securities has initiated coverage on Paramount Skydance (NASDAQ: PSKY) with a Buy rating and a price target of $13, according to recent reports. This follows the completion of the merger between Skydance Media and Paramount Global, forming a new entity named "Paramount, a Skydance Corporation" [2].

The research firm noted that the company's strategic moves, including the recent seven-year media rights agreement with TKO Group Holdings for UFC events and the formation of a new board of directors led by David Ellison as Chairman and CEO, position Paramount to expand its content distribution and production capabilities [1]. Guggenheim highlighted the company's "broad, technologically-forward strategy" and expects the fresh management team and implicit financial backing to provide support for PSKY shares [1].

However, Guggenheim also cited execution challenges ahead, noting the need for significant time and variability before any further transformative mergers and acquisitions. The firm expects more details to be available in the third-quarter earnings report in a few months [1].

The completion of the merger has positioned Paramount to forge a new path forward in the entertainment industry, combining its extensive creative library and global distribution network with Skydance's production expertise and technological capabilities [2]. The company will leverage strategic investments to capitalize on identified synergies and opportunities to streamline its business, with a focus on forward-thinking approaches to content creation and storytelling [2].

In the near term, Paramount will reorganize into three business units—Studios, Direct-to-Consumer, and TV Media—to streamline strategic decision-making and enhance production output [2]. The company will also transition to a single technology platform, reduce spend, and achieve efficiencies exceeding the previously announced US$2 billion target [2].

Guggenheim expects the company's financial focus to maximize long-term company value, balancing bold moves in growth areas with disciplined spending in others [2]. The research firm's positive outlook on Paramount Skydance's strategic moves and potential for growth supports its Buy rating and $13 price target.

References:
[1] https://za.investing.com/news/analyst-ratings/seaport-global-initiates-paramount-skydance-stock-with-neutral-rating-93CH-3832142
[2] https://content-technology.com/media-business/skydance-media-and-paramount-global-complete-merger/