We all know that the merger between Skydance and entertainment giant Paramount (PARA) was controversial pretty much since it started. And now, with a whole new administration coming into play, politics may ultimately shut the whole thing down. The good news, however, is that Paramount may have a trump card of its own in Shari Redstone. Investors were less sure, though, and sent Paramount shares down nearly 2.5% in the closing minutes of Monday’s trading.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
A report from the New York Post notes that Redstone and Trump are actually on friendly terms. Apparently, the two have “gotten along” over the years, and even still occasionally talk socially. Granted, the fact that Trump recently aimed a $10 billion lawsuit at Paramount over its CBS’ arm’s handling of an interview with vice president Kamala Harris may strain that friendliness a bit, but hope springs eternal, as they say.
Redstone, for her part, notes that she “understands Trump’s frustration with CBS,” though she does not believe much in the lawsuit he is aiming at the company. And between Redstone and Larry Ellison—who Trump has also had a relationship with in the past—it is hoped that the merger will ultimately go through. Only time, however, will ultimately tell, especially when so much of this depends on Trump officials as opposed to Trump himself.
Cable Channel Chopping Block
Meanwhile, a report from The AV Club notes that television is really not a priority at Paramount right now. In fact, about the only television channel that is safe from any kind of cuts or outright losses is CBS itself. Comedy Central, MTV…these are simply not “priorities” right now, the report noted.
In fact, some of these networks may end up divested, in much the same way that Comcast (CMCSA) did not so long ago and Warner Bros Discovery (WBD) was looking to do as well. Offers have already been made to buy BET, for example, and the idea that Paramount could be selling its cable presence off as well does make a certain sense. Throw in the fact, not so long ago, that Paramount was scouring the web presences of its various cable channels and that suggests that the cable line is just not that big a deal to Paramount any more.
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 29.91% loss in its share price over the past year, the average PARA price target of $12.60 per share implies 21.8% upside potential.
