For those not familiar, right now, one of the biggest events in movies is happening. Not an awards show, but rather, a look at what is coming for the next several months. It is called CinemaCon, and entertainment giant Paramount (PARA) recently hit the field, showing off what it would be gracing theaters with. Shareholders were less than pleased, however, as Paramount shares slid over 3% in the closing minutes of Thursday’s trading session.
So what did Paramount have to show off at the big event? Paramount’s history at CinemaCon has been somewhat mixed, historically. While in the past, it has brought out some impressive pieces—one year featured Tom Cruise and Christopher McQuarrie explaining a stunt from a Mission: Impossible movie in full detail—some years have not been so impressive.
This year got a big start from Tom Cruise as well, as—in the promotion of the latest Mission: Impossible title—he led off with a moment of silence for recently-deceased actor Val Kilmer. A promotion for the upcoming Naked Gun remake—though that is impossible to picture without Leslie Nielsen, until you see the trailer and marvel at Liam Neeson picking it up—was also on tap, as was another Spongebob Squarepants movie, suggesting that Paramount will have a lot to come. Oh, and another Smurfs movie is apparently on tap as well.
In the Background, the Merger
And overshadowing the upcoming slate of releases is the ongoing drama of the Skydance / Paramount merger. While it still seems to be on track, there are plenty of moving parts in here that could derail the entire process. From the Federal Communications Commission (FCC) to court battles of all stripes to the last-minute appearance of a new bidder, and even an angry President, the end result is that Skydance is keeping quiet at CinemaCon.
Analysts are starting to get concerned. Bryan Kraft at Deutsche Bank, who has a five-star rating on TipRanks, dropped his rating from Buy to Hold, citing a mounting uncertainty around the merger and how it will all turn out from there. Throw in the fact that no one knows how the plans Skydance made about a year ago when the merger started have been modified for the fact that it is now almost a year later, and that only adds to the uncertainty. The silence from Skydance might be the best move, until it can even confirm there will be a merger after all.
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 4.86% loss in its share price over the past year, the average PARA price target of $12.33 per share implies 7.17% upside potential.
