Paramount Stock Falls After Analyst’s Double-Downgrade. What BofA Said.

Reif Ehrlich wrote in a research note Monday that her previous bullish view on the stock came with the assumption that Paramount would sell some of its assets. However, despite receiving bids for assets like Showtime and BET Media Group, it doesn’t look like sales are coming anytime soon.

“Our concern is the longer it takes to execute potential asset sales, the less value they could ultimately garner,” the analyst said. She added that this, coupled with the challenging macro backdrop, creates an unfavorable medium-term outlook for the stock.

The Wall Street Journal, citing people familiar with the matter, reported in February that Paramount declined a $3 billion offer for Showtime. Showtime then merged with Paramount+ in June, and Paramount previously has said it expects to realize about $700 million of future annual expense savings from the merger.

The Associated Press reported in August that the company declined to sell BET Media Group.

Paramount declined to comment to Barron’s on the BofA Securities report. However, Chief Executive Robert Bakish said on the company’s third-quarter earnings call last week that “when it comes to M&A, we’re always open-minded, and we look at potential opportunities through the lens of really how we can maximize shareholder value.”

Shares of Paramount were falling 8% Monday to $12.68. The decline snaps a two-day winning streak for the stock, which jumped after the company last Thursday reported third-quarter earnings and revenue that beat Wall Street estimates. Paramount+ subscribers also reached around 63 million in the quarter, which was a gain from the the prior year’s 46 million and above analysts’ estimates.

Paramount stock has fallen 25% this year.

Write to Angela Palumbo at [email protected]