Morgan Stanley analyst Benjamin Swinburne downgraded Paramount (PARA) to Underweight from Equal Weight with a price target of $22, down from $32. The pivot to streaming has not reduced the risk to media estimates from a slowing economy, Swinburne tells investors in a research note. Advertisers and consumers are likely to pull back in a recession at a time when some media these stocks have outperformed the market year-to-date thanks to already low multiples, says the analyst. He is “incrementally cautious” on the TV/streaming group saying the pivot to streaming “is about to get more difficult.” Swinburne sees rising churn risk from consumers trimming their streaming portfolios in a more difficult economic environment. In addition, Apple (AAPL), Amazon (AMZN) and Netflix (NFLX) “appear to be increasingly eager to peel away” major U.S. sports from the pay-TV bundle, contends the analyst.
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