The potential deal between National Amusements and Skydance Media is causing a stir among Paramount (NASDAQ:PARA) investors, with deep concerns about issues of valuation. However, several new developments emerged that caught investors’ attention nicely, and Paramount shares blasted up over 8% in the closing minutes of Thursday’s trading.
The CinemaCon event, the largest exhibition trade organization for cinemas in the world, was a major win for Paramount today. It not only revealed plans to reboot the Scary Movie franchise but also announced its upcoming animated offerings. The latter are commonly quite substantial thanks to Paramount’s Nickelodeon connection.
There are plans in the making around several properties, including Paw Patrol, Teenage Mutant Ninja Turtles, a new outing for The Smurfs, and, of course, more from both Avatar: The Last Airbender and SpongeBob Squarepants. The return of Scary Movie took many by surprise, though given the state of horror filmmaking today, there will no doubt be plenty of fodder from which it can draw parody material.
Getting Scary in the Boardroom
Meanwhile, there are still plenty of terrified investors concerned that the National Amusements and Skydance Media deal might go through and see Shari Redstone sell out her chunk of Paramount to the other studio. The “two-step” deal, as it’s called, is currently in an exclusive period, with due diligence set to begin next week.
The notion is giving non-voting shareholders a bit of a panic, suggesting that such a deal would be great for Redstone but a troubling loss for the rest. With Paramount’s board already losing members and concerns already rising from those left over, the end result is not a bright one for Paramount so far.
Is Paramount Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 47.89% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 17.61% upside potential.
