Paramount Global (PARA), a leading media and entertainment company with a market cap of $7.6 billion, spans TV media, streaming, and filmed entertainment sectors. Based in New York, its extensive portfolio includes CBS, Showtime, and Paramount Pictures.
Shares of Paramount Global have significantly underperformed the broader market over the past 52 weeks. PARA has almost 30% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.6%. In 2024 alone, shares of PARA are down 23.7%, compared to the SPX's 15.7% gains on a YTD basis.
Zooming in further, PARA is also lagging behind the S&P 500 Communication Sector SPDR's (XLC) 27.3% gains over the past 52 weeks.
Paramount Global has underperformed due to declining linear TV viewership and an underwhelming streaming business that lacks scale. Additionally, the collapse of merger talks with Skydance Media and weaker performance relative to its media peers have contributed to its stock’s underperformance.
Nevertheless, the stock rose 5.7% on Jul. 2 following reports of active merger discussions with other media and tech companies to potentially enhance the competitive positioning of its Paramount+ streaming service.
For the current fiscal year, ending in December, analysts expect PARA's EPS to grow 157.7% year over year to $1.34. The company's earnings surprise history is promising. It topped the consensus estimates in all of the last four quarters.
Among the 26 analysts covering the stock, the consensus rating is a “Hold.” That’s based on four “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” and 12 “Strong Sells.”
This configuration is slightly less bullish than three months before, with five analysts suggesting a "Strong Buy."
On Jul. 17, Wells Fargo raised the price target to $10 and kept an "Underweight" rating on Paramount Global.
The mean price target of $12.65 represents a premium of just 10.8% to PARA's current levels. However, the Street-high price target of $19 implies a notable potential upside of 66.4% from the 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.
