Paramount Global Faces Challenges Ahead of Q3 Earnings Announcement

Paramount Global (PARA), based in New York City, operates as a major player in the media and entertainment industry. With a current market cap of $6.87 billion, this company creates and distributes a variety of content via television, streaming, and film platforms. Investors are keenly awaiting its Q3 earnings release, scheduled for Friday, Nov. 8, before the market opens.

Analysts Project Decreased Profits This Quarter

Analysts are predicting that PARA will report a profit of $0.19 per share, representing a decline of 36.7% compared to last year’s $0.30. Notably, Paramount has managed to exceed Wall Street’s earnings-per-share (EPS) estimates in each of the past four quarters.

Strong Q2 Performance Despite Tough Conditions

For the previous quarter, the company’s adjusted earnings reached $0.54 per share, significantly beating estimates by 285.7%. This success was largely driven by its streaming division, which offset revenue losses due to lower TV licensing and diminished cable subscriptions.

Future Predictions Look Promising

Looking ahead to fiscal 2024, analysts forecast an EPS of $1.58 for PARA, a remarkable increase of 203.9% from the $0.52 in fiscal 2023.

Year-to-Date Performance Under Scrutiny

Year-to-date, PARA stock is down 30.6%, significantly lagging behind broader indices like the S&P 500 Index ($SPX), which has gained 22.7%, as well as the Communication Services Select Sector SPDR ETF Fund (XLC), which shows a 25.2% increase.

Stock Performance Linked to Industry Trends

Paramount Global’s stock troubles are largely attributed to declining linear TV viewership and ongoing issues in its streaming division. The company also faced setbacks after the collapse of merger talks with Skydance Media, which weighed heavily on its shares.

Nevertheless, on Aug. 8, there was a brief moment of optimism when Paramount’s shares jumped over 5% in pre-market trading. This spike was a reaction to its stronger-than-expected Q2 results and the announcement of a plan to cut its U.S. workforce by 15%.

Analysts Weigh In on Future Prospects

The current consensus on PARA stock is cautious, maintaining a general “Hold” rating. Out of 26 analysts monitoring the stock, four rate it as a “Strong Buy,” 11 recommend a “Hold,” and 11 suggest “Strong Sell.”

Currently, PARA’s average analyst price target stands at $11.81, indicating a potential upside of 15% from its current trading levels.

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On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

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