Paramount Global (PARA, Financial) is currently in discussions with the Federal Communications Commission (FCC) as it progresses towards securing approval for its proposed merger with Skydance Media. This process involves considering various initial steps paramount to obtaining regulatory consent.
As part of the negotiations, one of the key considerations involves Paramount's commitment to refrain from certain corporate diversity initiatives. This aspect is reportedly a significant point of discussion between the FCC and the company.
Further complicating the merger's approval is a news-distortion complaint involving Paramount's "60 Minutes." FCC Chairman Brendan Carr has indicated that this complaint, stemming from edits made to a Kamala Harris interview last year, could influence the agency's evaluation of the merger.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Paramount Global (PARA, Financial) is $12.17 with a high estimate of $19.24 and a low estimate of $9.00. The average target implies an upside of 6.15% from the current price of $11.47. More detailed estimate data can be found on the Paramount Global (PARA) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Paramount Global's (PARA, Financial) average brokerage recommendation is currently 3.2, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Paramount Global (PARA, Financial) in one year is $14.14, suggesting a upside of 23.33% from the current price of $11.465. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Paramount Global (PARA) Summary page.
PARA Key Business Developments
Release Date: February 26, 2025
- Adjusted OIBDA: Increased 30% year-over-year to $3.1 billion.
- Free Cash Flow: $489 million, the highest in 4 years.
- Paramount+ Subscribers: Added 5.6 million in Q4, reaching a total of 77.5 million.
- Paramount+ Revenue Growth: Increased 33% for the year.
- D2C Segment Profitability Improvement: $1.2 billion for the year.
- TV Media Revenue: Declined 4% in Q4 to $5 billion.
- Filmed Entertainment Revenue: $1.1 billion in Q4.
- Global Box Office: Nearly $900 million in Q4.
- Net Leverage: Improved by 1.3 turns, reduced to 3.8x.
- D2C Advertising Revenue Growth: Increased 18% in 2024.
- TV Media OIBDA: $949 million in Q4.
- Free Cash Flow in Q4: $56 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Paramount Global (PARA, Financial) achieved a 30% year-over-year growth in adjusted OIBDA, reaching $3.1 billion.
- The company added 10 million new subscribers to Paramount+ in 2024, with a strong Q4 performance of 5.6 million new subscribers.
- Paramount+ saw a 33% increase in revenue for the year, driven by a strong content slate and improved engagement.
- Pluto TV experienced a record year with global watch time up 8% year-over-year and 16% in Q4.
- Paramount Global (PARA) improved its net leverage by 1.3 turns and generated $489 million of free cash flow, the highest in four years.
Negative Points
- The D2C segment swung to a loss of $286 million in Q4 due to the seasonality of the content slate.
- TV Media revenue declined 4% in Q4, impacted by linear ecosystem trends and fewer NFL and college football games.
- Filmed Entertainment OIBDA was a loss of $42 million in Q4, affected by marketing costs and the timing of Sonic 3's release.
- The company faces ongoing challenges in transitioning its advertising business from linear to digital.
- Paramount Global (PARA) expects Q1 adjusted OIBDA to decline year-over-year, partly due to the absence of the Super Bowl's contribution.
