Benzingaยท2025-05-21 19:38Core Viewpoint - JPMorgan analyst David Karnovsky maintained an Underweight rating on Paramount Global and lowered the price target from $11 to $10, citing ongoing challenges in the PayTV sector and expected losses in DTC through 2026 [1][2][3]. Group 1: Financial Performance and Projections - Paramount's first-quarter OIBDA was $688 million, exceeding Karnovsky's expectations of $649 million [4]. - The fiscal 2025 consolidated OIBDA estimate was reduced to $2.81 billion, reflecting a 9.9% decrease from prior estimates [4]. - The second-quarter TV Media advertising estimate was lowered to $1.62 billion, a 6.5% decline from previous expectations [4]. - Karnovsky expects a worsening ad decline in the third and fourth quarters, adjusting the fiscal 2025 TV Media advertising estimate to $6.91 billion, a 15.6% decrease [5]. - The fiscal 2025 TV Media OIBDA estimate was revised down to $3.46 billion, reflecting a 20.5% decline [6]. Group 2: Direct-to-Consumer (DTC) Insights - The fiscal 2025 Advertising estimate for DTC was decreased to $2.06 billion, a 2.6% decline from prior estimates [7]. - Conversely, the fiscal 2025 Subscription estimate was increased to $6.46 billion, reflecting a 17.3% increase due to prior price hikes [7]. - The fiscal 2025 DTC OIBDA was raised to -$96 million, an improvement from the previous estimate of -$158 million [7]. Group 3: Competitive Landscape - Karnovsky noted that while Paramount is making strides in cost-cutting and focusing on DTC profitability, the company's valuation remains a concern compared to peers, alongside macroeconomic uncertainties [3]. - In contrast, Walt Disney Co received an Overweight rating with a price target of $130, indicating a more favorable outlook in the industry [8].