It was not so long ago that entertainment giant Paramount (PARA) faced a serious dilemma. It could fight back against a lawsuit coming in from the President of the United States, Donald Trump, or it could settle said lawsuit. The consequences of either action could have been wide-ranging, so Paramount may have found a better plan: a mediator. Investors were not pleased, and shares slid nearly 2% in the closing minutes of Wednesday’s trading.
By bringing in a mediator, reports note, it increases the likelihood of a settlement being reached. This is likely leaving the “don’t settle” camp in consternation, and might be contributing to that downward slope in today’s trading. Paramount refused to comment on the matter, while attorneys for the president noted “President Trump will pursue this vital matter to its just and rightful conclusion.”
And this battle will take quite some time to resolve, too; court filings reveal that the two are apparently obliged to “try mediation” before December 20. And should they be unable to agree on who the mediator is, the court would have to appoint one two weeks before the mediation deadline. This could put any kind of resolution in this case off until 2026.
Earnings Report Scrutinized
Meanwhile, Paramount is poised to release its fourth quarter earnings report this afternoon. Analysts are expecting quite a hit, with $8.14 billion, a growth of 6.5% against this time last year. Adjusted earnings, meanwhile, are expected around $0.13 per share.
While Paramount has largely confirmed the earnings within the last month, a miss would not be a surprise. Paramount has missed Wall Street estimates six times in just the last two years. That does not provide a particularly good track record. But with the Skydance merger still in play—if it is looking a little in doubt based on the sheer number of challenges it has seen so far—the end result is this earnings season will be particularly closely watched.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on one Buys, one Hold and three Sells assigned in the past three months, as indicated by the graphic below. After a 2.17% rally in its share price over the past year, the average PARA price target of $11.80 per share implies 4.52% upside potential.
