With the latest of Paramount’s (NASDAQ:PARA) potential acquisition deals down and out, and no real signs of potential replacements stepping up, Paramount’s inherent future is now in question. And the signs, based on several recent reports, aren’t looking good. Paramount investors aren’t feeling the love either, and shares are down over 2% in Monday afternoon’s trading.
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The first sign of trouble came out of Engadget, who described Paramount’s “…strategy of purposeful rot…” as one that “…doesn’t even make sense.” Paramount’s recent content clear-cutting that took with it a slew of old television episodes previously available for free left viewers unable to watch old favorites. But with many of those shows not migrating to Paramount+, that leaves consumers with no real option, a problem these days.
Meanwhile, plans to cut costs are being excoriated elsewhere, with one source describing the multiple departures from Paramount as “…leaving Paramount offices faster than moviegoers left the theaters after last year’s disaster of a disaster film The Core.” With Paramount selling property and trying to make up streaming losses with “Paw Patrol” toy revenue, there’s a clear sign of something wrong here.
Potential Saving Graces
Yet all is not lost for Paramount. Reports suggest it’s bulking up its lineup by setting up a new partnership with the Described and Captioned Media Program to cover “hundreds of hours of Nickelodeon’s animated and live-action series…” This will make said content better available to both “…young viewers and students with disabilities.”
There are also whispers of a potential land deal as Paramount looks to sell the studio lot, though with an option to buy it back again. Reports suggest such a deal could mean a whopping $2 billion in income, enough to dwarf planned cost cuts four times over.
Is Paramount Global a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, six Holds and nine Sells assigned in the past three months, as indicated by the graphic below. After a 36.86% loss in its share price over the past year, the average PARA price target of $11.68 per share implies 15.19% upside potential.
