While there are new concerns brewing that the Skydance and Paramount (PARA) merger may be scuttled over politics, there is another concern waiting after the merger goes through. Assuming, of course, it does. That came from a Deadline report that pointed out remarks from an S&P analyst, calling attention to Paramount’s near-term credit. The concern weighed on investors, too, who sent shares down fractionally in Tuesday afternoon’s trading.
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Naveen Sarma, S&P Global Ratings managing director and media and telecom sector lead, noted that many of the current issues facing Paramount are really not going to change because Skydance picked it up. The rise of cable-cutting, the decline of broadcast networks…these things are still there. And, while Skydance may have a strategy in mind to address this—as we’ve heard more than a few times now about Skydance’s interest in technological superiority—these plans will likely not help for at least a year.
Meanwhile, S&P Global Ratings, among others, are essentially taking a wait-and-see stance on Paramount’s current operations. The trends facing Paramount are substantial, but a strategy may be forthcoming faster than expected. There are, essentially, too many potential factors working together and against each other to make many projections at this point.
A Content-Led Recovery?
The content, meanwhile, will likely have to take up a lot of the slack. And thankfully, there is some of that coming out. Space.com recently revealed that a new trailer dropped for the Star Trek: Section 31 release about Starfleet’s covert intelligence operation. Given that Space.com‘s reaction was, “And now we can’t wait until 2025,” that suggests good things.
With some Trek now out of the picture—Discovery has wrapped and Lower Decks will show its last episode in under two weeks—Paramount needs to get its biggest franchise back up and swinging. Plus, the Paramount Network recently started showing the prequel series to Yellowstone, 1923, on its platform. This, in turn, should draw more attention to it and hopefully get more advertisers interested as well as more subscribers coming on board.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, seven Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 30.51% loss in its share price over the past year, the average PARA price target of $12.60 per share implies 12.3% upside potential.
