Entertainment giant Paramount (PARA) has been troubled lately. It is facing disturbing earnings results and issues with the overall viewing market. As a result, Paramount shares were down fractionally in Monday afternoon’s trading. The latest troubles for Paramount emerged after Cerity Partners’ chief equity strategist, Jim Lebenthal, who also appears frequently on CNBC, decided to pull back on Paramount shares, selling them off and using the cash to buy in on Disney (DIS). Given Disney these days, some might have questioned such a move.
Nevertheless, Lebenthal offered comment on his move, noting that he found the Skydance/Paramount merger distasteful, especially with Shari Redstone basically in charge of the deal. But he didn’t sell off altogether because he believed that such a move would be a capitulation to emotion.
Streaming Isn’t the Problem
However, one major problem for media giants like Paramount—not to mention Disney—is that they are seeing their streaming services becoming profitable at the same time that their standard cable and network operations are in open decline.
In the last few weeks, we’ve seen both Paramount and Warner Bros Discovery (WBD) heavily write down their linear TV operations. Having those anchors around their collective necks is a big part of the reason they are struggling despite profitable streaming platforms.
Is Paramount a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 29.92% loss in its share price over the past year, the average PARA price target of $12.07 per share implies 16.28% upside potential.
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