# J.P. Morgan Gives Skydance a Neutral Rating and Sets a $9 Target

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/39808
Published: 2026-10-24T09:11:51.000Z
Updated: 2026-10-24T09:11:51.000Z
Section: Business

> The bank sees potential content and cost gains after the Warner Bros. Discovery merger but flags cord-cutting, subscriber, advertising and debt risks.

J.P. Morgan assigned Skydance Corporation a Neutral rating and a $9 price target, balancing potential merger benefits against cord-cutting and debt risks at the newly combined company.

The target is 15% above Skydance's Oct. 22 closing price. The merger between Paramount Skydance and Warner Bros. Discovery is complete, and Skydance shares are no longer restricted. J.P. Morgan considers potential synergies achievable, but says investors need evidence that integration will improve cash generation. That proof matters to the company's EBITDA and free cash flow targets, which the bank says investors may doubt.

J.P. Morgan sees two routes to gains: extracting more value from the combined content business and cross-selling streaming services. It also points to cost reductions from removing overlapping operations. The test for investors is whether combining the businesses translates into stronger cash generation.

The bank also highlighted Skydance's exposure to linear television. A continued shift away from cable threatens an important earnings source, while a weaker advertising market could add pressure. High net leverage leaves the company little room for execution errors, and subscriber retention remains another risk.

Streaming growth depends partly on charging a premium for ad-free plans and offering bundles. J.P. Morgan sees Netflix and Disney increasing their spending as a challenge to Skydance's efforts to add subscribers. The company also faces the task of retaining existing streaming customers while pursuing growth.

J.P. Morgan described the film pipeline as strong and the annual production mandate as manageable. It identified Universal as the only recent studio example of success at a comparable output pace, leaving few recent comparisons for Skydance's target.