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Paramount Global (NASDAQ:PARA) was downgraded to Underperform and its price target cut to $24 from $49 by Wolfe Research analyst Peter Supino on Thursday.
The move came as part of a broader note, with the analyst saying Paramount is late to streaming and “playing catch-up to gain share in an increasingly competitive ’22.”
The analyst argued that Paramount’s content is a “tier below” that of Netflix (NASDAQ:NFLX), Disney (NYSE:DIS), and Warner Bros (NASDAQ:WBD), putting the company at a competitive disadvantage versus the three “must haves.”
In addition, he feels the company’s portfolio of niche cable networks is “more vulnerable to secular headwinds in linear pay-TV, relative to key peers.”
Despite legendary investor Warren Buffett recently acquiring a stake in Paramount, Supino believes the company’s valuation is optimistic, and he is not convinced the company’s streaming investment will pay off.
Paramount shares have dipped more than 3% Thursday.
