PSKY Stock Breaks Six-Day Losing Streak After Morgan Stanley’s Double Upgrade

• Morgan Stanley raised PSKY price target to $14 from $11.
• PSKY snaps six-day losing streak.
• Three analysts rate the stock ‘buy’, 11 rate ‘hold’ and six ‘sell’ as per data from Koyfin.

Paramount Skydance (PSKY) share price jumped 8% on Friday following a double upgrade from Morgan Stanley and a price target hike. 

Morgan Stanley analyst Sean Diffley upgraded the stock to ‘Overweight’ from ‘Underweight’ and upgraded the share price target to $14 from $11 per share. The proposed acquisition of Warner Bros. Discovery (WBD) presents a “big, bold, and game-changing move according to Diffley. 

“Pessimism presents an opportunity as the Warner deal is transformative and AI can turbocharge legacy assets,” said Diffley, who sees a "clear synergy and de-levering path."

In late February, Paramount won a legal battle with Netflix to buy Warner Bros., the parent company of HBO Max, which owns some of the world's best movie intellectual properties, including Game of Thrones, Harry Potter, and The Lord of the Rings. The $81 billion merger is expected to close in the third quarter, but is subject to regulatory approval.  

While Diffley described the double upgrade as Morgan Stanley’s “riskiest and most out-of-consensus call”, he pointed out that there are several underappreciated elements of the Warner Bros. acquisition. 

Paramount can save more than $6 billion, or about 11% of operating expenses, through consolidation with Warner Bros., according to Diffey, giving Paramount a way to grow its streaming and studio assets faster. 

However, Morgan Stanley acknowledged that there are regulatory hurdles to the completion of the deal, and the upgrade is “contingent on approval.” 

PSKY Retail View 

Retail sentiment on Stocktwits was ‘normal’ with ‘normal’ message volumes. 

One user was bullish on the stock and suggested an upcoming bull run. 

The stock has lost 17.2% year-to-date. 

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