Entertainment giant Paramount (NASDAQ:PARA) recently released its earnings report, and the numbers, by and large, were looking quite solid. Not everything was a win, however, and Paramount is looking to capitalize on its successes and respond to what few issues it had this quarter, like a decline in adjusted earnings. The combination of this proactive response and solid earnings numbers gave Paramount a fractional boost in Thursday afternoon’s trading.
After the frantic excesses of the last couple of years, when studios raced to get all the content they could get into their streaming services to draw attention, the new focus is on profitability. Programming spend is now a closer focus as Paramount looks to lower costs, raise revenue, or both at once.
One way it’s looking to do that is with what CFO Naveen Chopra calls “…lower production costs, evolving format mix, and optimizing and sharing content across linear and streaming.” One point specifically acknowledged was the rise of “..modest-cost titles like Mean Girls and Bob Marley: One Love” to augment overall profitability.
Streaming Is Drawing Advertiser Interest
The goal of any business is to make money, which it does by either reducing costs or improving profit. To that end, Paramount has several potential irons in the fire. While the ad market is looking challenging ahead, there are some bright spots. Streaming, for example, is drawing quite a bit of advertiser interest as more viewers make the switch from linear television.
As for the so-called “skinny sports bundle” that Fubo (NASDAQ:FUBO) is currently fighting, Paramount is convinced that it likely won’t live up to subscribers’ expectations.
Is Paramount Global a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on four Buys, three Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 48.86% loss in its share price over the past year, the average PARA price target of $14.54 per share implies 31.23% upside potential.
