It is indeed upfront season again, and early word for entertainment giant Paramount (PARA) is looking reasonably good. Paramount is trying a whole new format when it comes to the upfront this year—a series of small dinners—and reports suggest it is well-received. Though everybody’s upfront is a little tainted this year, from the look of things, as the environment is not proving particularly receptive. Investors are holding out hope, though, and Paramount shares notched up fractionally in the closing minutes of Tuesday’s trading.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
With the fall television season just a few months away, media platforms all up and down the pike are lining up advertiser support to help keep everything from going pure subscription. But many can agree, this is a “strange” year for the upfronts. Tariffs are front and center. Concerns about potential recession, long-delayed or perhaps just long-denied, depending on who you talk to, lurk in the background.
But despite all this, clients are still piling in on the upfronts, according to reports. One major ad buyer who went uncited noted that clients are still buying in, but are looking for more flexibility in the deals they make. They want deals that can be “adapted on the fly” in case of more uncertainty in the overall environment. This should be particularly useful for Paramount, as its series-of-small-dinners upfront lends itself well to a more flexible environment where everyone gets their own deals.
Scatter is Up
Much has been made so far about Paramount’s unique upfront strategy, and one key point has slipped out about how well things are going so far: scatter. Scatter is up “double-digits” so far this quarter, and that is seen as a function of Paramount’s product and Paramount’s new upfront presentation.
For those not familiar, “scatter” refers to the practice of buying advertising outside of the upfront period. While the upfront is useful to build budgets and have a clearer idea of what kind of space will be used and committed to, scatter is a measure of flexibility. And while co-CEO Chris McCarthy is pleased with what has been seen so far, it is also clear that, as noted previously, this is a somewhat different market. Advertisers want deals with greater flexibility, and the rise in scatter purchases suggests that those advertisers are out to get that flexibility.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, seven Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 3.08% loss in its share price over the past year, the average PARA price target of $12 per share implies 0.04% upside potential.
