So entertainment giant Paramount (PARA) got a bit of a mixed bag of news today. While the Mission: Impossible franchise is proving as popular as it ever was, the bad news is that, with an imminent end afoot, its star Tom Cruise is poised to go out with a bang. But the news was good enough for investors, meanwhile, who sent shares up modestly in the closing minutes of Tuesday’s trading.
The new trailer has landed for Mission: Impossible—The Final Reckoning, and, despite just being eight days old, has racked up 14 million views so far. That pretty much signifies plenty of interest, and a very real chance at a major hit for Paramount, which it needs right now. But this might also be the final run for Tom Cruise, who, at 62, is still doing an impressive array of stunts, and is a good part of why people show up.
There are signs that The Final Reckoning may not be so final after all, but may also have to get along without Cruise, unless, of course, Cruise is offered sufficient impetus to stay. So while some reports think that Cruise may pull out of any future involvement, others think that this is just a negotiating tactic on Cruise’s part that will cut into Paramount’s take on this likely winner at the box office.
A Discouraging Report
Meanwhile, analysts did not have much of a kind word for Paramount either, as analysts from UBS stepped up to cut the price target. While the Sell rating is still in place, UBS cut back the price target from $11 to $10 per share.
The reason? Ad sales, basically; with an economic downturn to some degree now likely, if it has not already been going on, that is going to do bad things to ad sales. Businesses will be paring back their spending and sticking largely to reminder advertising, and less of it. That means Paramount will take in less cash from its already-limping linear operations.
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 5.66% rally in its share price over the past year, the average PARA price target of $12.33 per share implies 13.69% upside potential.
