Shares of entertainment company Paramount (NASDAQ:PARA) fell over 8% in Monday’s trading session. The drop came after Bank of America analyst Jessica Reif Cohen double-downgraded the stock to Underperform from a previous Buy rating and cut her price target to $9 from $32.
The analyst said that her previous bullish view was based on the assumption that the company would sell some of its assets. According to the analyst, the asset sales are far from happening despite Paramount receiving bids for Showtime and BET Media Group, which she said the company surprisingly walked away from. Furthermore, she noted that the primary concern is that the assets’ value may drop the more time it takes to find a buyer.
Additionally, she stated that the stock has a poor medium-term outlook owing to the challenging economic climate. So far this year, Paramount shares have declined by over 24%.
Is PARA a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on four Buys, three Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PARA price target of $16.17 per share implies a 28.69% upside potential.
