Paramount’s Stock Fades as Warner Bros. Takeover Swims in Red Ink: BofA

Paramount Skydance fended off Netflix in the battle to acquire Warner Bros. Discovery (WBD), but the real challenge now is integrating the massive company, a process that will take time, BofA Securities said, Nate Wolf reported for Barron’s Daily.

Warner Bros. will join a company already undergoing a transition. (Photo: Coolcaesar, Wikimedia Commons)

The firm reiterated an “Underperform” rating on Paramount stock and cut its price target to $11 from $13 in a research note released recently.

While the merger could strengthen the company’s long-term prospects, the path toward realizing that potential remains long and uncertain, BofA said.

Investors appear to share that view.

Paramount stock fell 7.4% to $10.37 on Tuesday, putting it on track for its sixth decline in the past seven sessions. The shares have now erased the entire 21% gain recorded on Feb. 27, the day Paramount announced its plan to acquire Warner Bros.

Warner Bros. will join a company already undergoing a transition.

Paramount and Skydance Media merged last summer, placing the combined entity under CEO David Ellison, the son of Oracle co-founder Larry Ellison. Paramount had been a Barron’s stock pick after that earlier merger.