Paramount Skydance (PSKY) Stock Drops 8% After BofA Price Target Cut

TLDR

• Paramount Skydance (PSKY) fell ~7.7% on Tuesday to $10.37
• BofA cut its price target from $13 to $11, keeping an “Underperform” rating
• Fitch downgraded PSKY’s credit to “junk” status; S&P put it on “negative watch”
• The stock has now erased its entire 21% gain from Feb. 27 when the WBD deal was announced
• PSKY is down 21.8% year-to-date and sits 47.8% below its 52-week high

Paramount Skydance won the bidding war for Warner Bros. Discovery. Now the market is asking: at what cost?

PSKY dropped roughly 7.7% on Tuesday to $10.37, extending a losing streak that now spans six of the past seven sessions. The stock has fully reversed the 21% surge it posted on Feb. 27, when Paramount announced its deal to buy Warner Bros. Discovery after Netflix walked away from the contest.

Paramount Skydance Corporation Class B Common Stock, PSKY

The sell-off came after BofA Securities analyst Jessica Reif Ehrlich reiterated her Underperform rating and slashed her price target from $13 to $11. Her note was blunt: the merger adds long-term potential, but the road to realising it is long and uncertain.

The timing matters here. Paramount and Skydance Media only completed their own merger last summer. CEO David Ellison, son of Oracle co-founder Larry Ellison, had barely started that integration before layering on a deal roughly twice the size.

Debt Load Raises Red Flags

The financial picture is weighing on investors. Paramount will carry a net debt-to-EBITDA ratio of 4.3 when the Warner Bros. deal closes, even after factoring in projected cost synergies. The company says it can bring that down to a 3-to-1 investment-grade level within three years — but credit agencies aren’t waiting.

Fitch Ratings downgraded PSKY’s credit to junk status. S&P Global Ratings placed it on negative watch. Political scrutiny has added another layer of concern, with attention on deal financing that partly involves sovereign wealth funds from the Middle East.

The combined company would be massive. Paramount Pictures and Warner Bros. together control an estimated 30% of the U.S. box office, with franchises including Star Trek, Harry Potter, and DC Comics. The merger also brings together networks like CBS, TNT, and CNN.

Content Spending Keeps Climbing

Ellison has shown a willingness to pay up. Paramount has already secured rights to South Park and UFC events through TKO Group. BofA noted that PSKY “paid well above the next best offer for both of these deals.”

The company also plans to release 30 films a year — 15 from each studio — and boost streaming content. Ehrlich called that output “a significant undertaking” with uncertain outcomes.

The NFL looms as the next major cost. Paramount currently holds part of the league’s media rights and wants to keep them in the next deal cycle. BofA warned the company could either lose that package on price, or pay a steep increase to hold it.

PSKY is down 21.8% year-to-date. At $10.31, it sits 47.8% below its 52-week high of $19.73 hit in September 2025. The stock has had 27 moves greater than 5% over the past year, pointing to just how volatile this name has been.

Paramount declined to comment on the BofA note.

The post Paramount Skydance (PSKY) Stock Drops 8% After BofA Price Target Cut appeared first on CoinCentral.