With the ongoing furor over a potential acquisition of media company Paramount (NASDAQ:PARA), it’s no surprise that we’re starting to see outside observers take a stand on the matter. According to blogger Howard Jay Klein, there is an unnamed analyst, who also serves as a Hollywood producer, that just posted his own stance on the matter: that it’s time to go with Sony (NYSE:SONY) or throw the whole thing over. That’s not what investors wanted to hear, as Paramount slipped over 2% in Thursday afternoon’s trading as a result.
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The biggest reason to stick with Sony, the producer-turned-analyst noted, is that Sony has the ability to take Paramount’s assets and build on them. Of course, that’s also part of the problem; a lot of Paramount’s value is in its intellectual property, built up over the course of decades. Putting a price tag on that is like putting one on art: how do you objectively value that which is inherently subjective?
The producer noted that is why Paramount should go with Sony. Skydance Media has some experience here—they are behind the media juggernaut that is “The Walking Dead,” after all—but Sony has been doing this for decades.
Expanding Its Operations
Meanwhile, that IP has to be used to fire up a whole slew of expansion options. Indeed, Paramount just added Magnite (NASDAQ:MGNI) to its lineup of shoppable ads, which will open up the floor to programmatic ad buyers and provide more opportunities for Paramount to pull in revenue on things like selling Ray-Ban sunglasses in connection to the “Top Gun” movies.
Further, it’s also teaming up with Lion Star and Everest Place to bring out the Nickelodeon Hotels & Resorts Orlando in Kissimmee, Florida. Not too far from Walt Disney World and Universal Studios theme parks, the hotel will feature a combined total of over 400 rooms and condo units, complete with plenty of connection to popular kid-friendly Nickelodeon properties.
Is Paramount a Buy or Sell Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, 10 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 17.22% loss in its share price over the past year, the average PARA price target of $12.64 per share implies 5.95% upside potential.
Is PARA the Right Stock to Buy for Passive Income?
Before you hurry to invest in PARA, think about the following:
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