Paramount Stock Falls 7.4% as BofA Cuts Target to $11

Edgen Stock

·Mar 10 2026, 19:42

Share to

Share to

Copy link

Key Takeaways

Paramount Skydance stock declined sharply after BofA Securities reiterated its "Underperform" rating and cut its price target, citing significant risks and a prolonged timeline for the integration of Warner Bros. Discovery. The market's reaction erased all gains made since the merger announcement, reflecting investor apprehension over the company's high debt load and aggressive spending strategy.

BofA Securities reiterated an "Underperform" rating on Paramount, slashing its price target to $11 from $13 due to integration challenges.
The company's stock fell 7.4% to $10.37, wiping out a 21% gain recorded since the Warner Bros. deal was announced on February 27.
The combined entity will start with a high net debt-to-EBITDA ratio of 4.3, with a goal to reduce it to 3-to-1 within three years.

Stock Drops 7.4% as BofA Slashes Price Target

Paramount Skydance (PSKY) stock dropped 7.4% to $10.37 on Tuesday, erasing the entire 21% gain it had accumulated since announcing its deal to acquire Warner Bros. on February 27. The sharp decline followed a BofA Securities report that reiterated an "Underperform" rating and cut its price target on the media company to $11 from $13. Analysts pointed to a long and uncertain path for integrating the new, larger entity, a task compounded by the fact that Paramount and Skydance only completed their own merger last summer.

Integration Risks Mount with 4.3 Debt-to-EBITDA Ratio

The acquisition creates a media giant that controls an estimated 30% of the U.S. box office, but it also introduces considerable financial strain. Paramount projects it will operate with a net debt-to-EBITDA ratio of 4.3 once the deal closes. While the company stated it can reach an investment-grade ratio of 3-to-1 within three years, investors appear wary of the execution risk. BofA analyst Jessica Reif Ehrlich highlighted concerns that management's "aggressive posture" on content investment, demonstrated by expensive deals for properties like "South Park" and UFC events, could add further pressure as it navigates the complex merger.