Analysts Bearish on Paramount Skydance Stock Despite Merger

Top Wall Street analysts have issued a "Sell" rating on Paramount Skydance (PSKY) stock due to uncertainty about the merged company's future prospects and a recent surge in its share price. Morgan Stanley analyst Benjamin Swinburne lowered the price target from $12 to $10, implying a 31.9% downside potential, while Bernstein analyst Laurent Yoon maintained a Sell rating and an $11 price target. Analysts remain bearish on PSKY stock despite the completion of the highly anticipated merger between Paramount and Skydance.

Top Wall Street analysts have issued a "Sell" rating on Paramount Skydance (PSKY) stock, expressing concerns about the merged company's future prospects and a recent surge in its share price. The analysts' bearish sentiment follows the highly anticipated merger between Paramount and Skydance, which was officially completed on August 8, 2025.

Morgan Stanley analyst Benjamin Swinburne lowered the price target from $12 to $10, implying a 31.9% downside potential. Bernstein analyst Laurent Yoon maintained a Sell rating with an $11 price target. Both analysts remain cautious about the merged entity's financial outlook and the potential challenges it may face in the competitive media landscape.

The merger, which combined Paramount's 18,000 employees with Skydance's 2,000, has been met with uncertainty regarding the Federal Communications Commission's approval of the terms. Despite the official approval, the merged company, New Paramount, is preparing for layoffs that could affect between 2,000 and 3,000 employees, as reported by Nasdaq [1].

The analysts' concerns are further compounded by the recent layoffs and cancellations within the company. For instance, The Late Show with Stephen Colbert has been canceled, adding to the overall uncertainty. The layoffs, expected to begin in November, will impact approximately 10% of the workforce, making the situation challenging for employees [1].

The merger aims to help Paramount compete with other media giants such as Sony, Warner Bros. Discovery, and Disney. However, the analysts' bearish outlook suggests that the challenges ahead may outweigh the potential benefits of the merger.

References:
[1] https://screenrant.com/paramount-skydance-merger-layoffs/
[2] https://www.marketbeat.com/stocks/NASDAQ/PSKY/forecast/