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Warner Bros. Stock Is a Buy, Paramount Skydance Is a Sell. What Analysts Are Saying.

Oct 08, 2025 14:24:00 -0400 by Mackenzie Tatananni | #Media

Paramount Skydance is exploring a bid for Warner Bros. Studios, according to reports. (Eric Thayer/Bloomberg)

Key Points

Warner Bros. Discovery has attracted buzz after becoming the target of a takeover effort. While it’s unclear what the future has in store for the media giant, some analysts have high hopes ahead of earnings.

Guggenheim analysts boosted their price target on the shares to $22 from $14 and maintained a Buy rating in a note Wednesday. Warner Bros. is set to report third-quarter earnings at the start of November, and those numbers should reflect content-driven top-line strength primarily within its Studios division, analysts wrote.

Analysts see it reporting third-quarter revenue of $2.8 billion and earnings before interest, taxes, depreciation, and amortization of $789 million, up from previous estimates of $2.7 billion and $640 million, respectively. The updated figures partially reflect recent strong film performance led by movie titles like Weapons, The Conjuring: Last Rites, and One Battle After Another, the firm wrote.

However, this strength may not last. Guggenheim lowered its fourth-quarter outlook to $100 million below consensus, citing “a lighter slate.”

The firm noted that investor discussion remains centered on Paramount Skydance making a bid to buy the entire company. This comes even after Warner Bros.’ announced earlier this year that it plans to split into two public companies, one housing its Global Networks business and the other its Streaming and Studios business. The transaction should close by mid-2026, Warner Bros. said.

“While we have no view on the likelihood of a specific future transaction or asset sale, we expect investors will remain focused on the potential for the business, and in particular the Warner Bros. studio and HBO streaming service, in an incrementally consolidated media environment,” analysts wrote.

There has been no shortage of chatter about a possible deal. A report Wednesday said private-equity firm Apollo Global Management was in talks with Paramount to join its takeover bid. Apollo Global didn’t immediately respond to a request for comment.

Shares of Warner Bros. Discovery declined 4.2% to $17.82 on Wednesday, erasing earlier gains after rising as high as $19.47 during the session. Paramount Skydance fell 1.6%. The benchmark S&P 500 was up 0.5%.

Also on Wednesday, UBS analysts raised their price target on Paramount Skydance shares to $12 from $10 to reflect the closing of the Skydance deal in early August. The firm continues to rate the stock at Sell.

New management is investing heavily in content, including a roughly $1 billion annual rights deal for UFC and the $150 million acquisition of the Free Press, while simplifying its streaming offerings, analysts wrote.

A potential deal with Warner Bros. “would re-shape Hollywood and give the company the heft to compete against the streaming giants” like Netflix, analysts continued. “That said, visibility remains limited and the company continues to face an increasingly difficult industry backdrop.”

UBS is upbeat about a potential deal, but analysts have their reservations. Despite being seen as an effort to diversify content, the pro forma company would still have high exposure to traditional general entertainment networks, the firm noted. Meanwhile, visibility around valuation, deal structure, and the possible dilution of minority Paramount shareholders remains limited.

Sentiment on Wall Street is mixed. Of 27 analysts tracked by FactSet, 11 rate Warner Bros. Discovery stock at Buy or the equivalent. Fifteen rate it at Hold, and one at Underweight.

The sentiment is considerably more negative with regard to Paramount. Just two analysts rate the stock at Buy or the equivalent. Fourteen rate it at Hold, while 10 rate it at Sell or Underweight.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com