New York-based Paramount Global Cl B (PARA) is a prominent media and entertainment conglomerate with a market cap of $8.4 billion. It operates worldwide, creating premium content and experiences across television, streaming, and filmed entertainment segments.
Shares of Paramount Global have significantly underperformed the broader market over the past 52 weeks. PARA has declined 22.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied roughly 27.5%. In 2024 alone, shares of PARA are down 18.7%, compared to the SPX's 11.2% gains on a YTD basis.
Zooming in further, PARA also lags behind the Dynamic Leisure And Entertainment Invesco ETF’s (PEJ) 9.9% gains over the past 52 weeks and 7.2% gains on a YTD basis.
Paramount Global’s underperformance relative to the broader market is due to last year’s prolonged Hollywood strikes, a weak advertising market, and declining cable subscriptions in the U.S., all of which have eroded profits for its TV business.
However, Paramount Global grabbed investors’ attention with the news of a lucrative all-cash buyout offer of $26 billion from Sony Group Corporation (SONY) and Apollo Global (APO), triggering a 13% surge in its stock price on May 2. Yet, PARA stock slid earlier this week on news that Sony was rethinking its bid.
For the current fiscal year, ending in December, analysts expect PARA to report EPS growth of 153.9% to $1.32. Over the last four quarters, the company has consistently surpassed consensus EPS estimates. In the most recent quarter, the company reported EPS that surpassed expectations but missed sales targets marginally.
Meanwhile, the consensus view on PARA appears to be neutral. Among the 26 analysts covering PARA stock, the consensus rating is "Hold." That’s based on four "Strong Buy" ratings, one "Moderate Buy," 11 "Holds," one "Moderate Sell," and nine "Strong Sell" ratings.
This configuration is less bullish than a month before with five "Strong Buys," two "Moderate Buys," and eight "Strong Sell" ratings.
Earlier this month, Argus downgraded Paramount Global from "Hold" to "Sell," citing uncertainty around its sale process. The analyst called the sale a "fiasco" due to key executive departures, including board members and the CEO, raising doubts about the company's future and merger prospects.
The mean price target of $13.18 suggests the stock has an upside potential of 9.7%. The Street-high target of $19 suggests that the stock could rally as much as 58.1% from its current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
