BofA Securities analyst Jessica Reif Ehrlich has double-downgraded shares of Paramount (ticker: PARA) to Underperform from Buy and slashed her price target to $9 from $32. The reason behind this downgrade was the entertainment company's lack of preparation to sell some of its assets.
Previously, Reif Ehrlich had a bullish view on the stock, assuming that Paramount would sell some of its assets. However, despite receiving bids for assets like Showtime and BET Media Group, it appears that sales are not in the near future.
The longer it takes for Paramount to execute potential asset sales, the less value they could ultimately achieve, according to the analyst. This, combined with the challenging macroeconomic conditions, creates an unfavorable medium-term outlook for the stock.
In February, Paramount declined a $3 billion offer for Showtime, as reported by The Wall Street Journal. Similarly, in August, the company declined to sell BET Media Group, according to The Associated Press.
Paramount did not immediately respond to a request for comment. Chief Executive Robert Bakish mentioned on the company's third-quarter earnings call last week that they are open-minded when it comes to mergers and acquisitions and focus on maximizing shareholder value.
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