Paramount stock rating upgraded by CFRA as Skydance takeover brings fresh vision

CFRA has upgraded Paramount Global (NASDAQ:PARA) from Hold to Buy, raising its price target to $19.00 from $13.00, citing the company's change in control as Skydance Media acquires a 77% stake. The research firm expressed confidence that the new management team, led by David Ellison, will drive innovation and modernization, maintaining strong EPS and revenue projections for 2025-2026 and anticipating positive free cash flow by 2025. This upgrade also considers Paramount's recent $7.7 billion deal for exclusive U.S. rights to UFC events from 2026 to 2032.

Analysis

CFRA's upgrade of Paramount Global (PARA) to Buy from Hold, coupled with a price target increase to $19.00 from $13.00, is primarily driven by a significant change in corporate control. The key catalyst is Skydance Media's acquisition of a 77% controlling interest, which installs a new management team led by David Ellison and Jeff Shell, who are expected to drive innovation and modernization. This bullish outlook is underpinned by maintained EPS estimates of $1.35 for 2025 and $1.55 for 2026, alongside revenue projections of $29.0 billion and $30.6 billion for those years, respectively. The company's fundamental health is highlighted by a gross profit margin of nearly 69% and an expectation to generate positive free cash flow in 2025. The strategic vision is further supported by a recent $7.7 billion deal securing exclusive U.S. rights for UFC events from 2026 to 2032, indicating a focus on long-term premium content acquisition.

Key Decisions for Investors

• Given the strong analyst upgrade and M&A catalyst, investors may view this as a strategic entry point, as the new $19.00 price target suggests significant upside potential based on the anticipated management-led turnaround.
• It is crucial to monitor the execution of the new leadership team and track progress towards achieving positive free cash flow in 2025, as this is a cornerstone of the bullish thesis presented by CFRA.
• Investors should mark the August 11, 2025 earnings report as a key event to validate the firm's financial trajectory and confirm if it remains on track to meet the maintained revenue and EPS projections for 2025.