[ad_1]
Any conversation about the most successful investors of all time should always include: berkshire hathaway CEO Warren Buffett. This legendary investor is known as the “Oracle of Omaha” (and after his hometown of Omaha, Nebraska) for his uncanny and consistent ability to discover successful investments that others may have missed. It is called “person.”
Buffett has been running the company for nearly 60 years, amassing an unparalleled track record. Since he took over as CEO in 1965, Berkshire Hathaway’s stock price has risen nearly 20% annually, and a mind-boggling 3,787,464% overall.
So it’s no wonder that investors flock to Berkshire stock selections in search of diamonds in the rough. One of his particularly interesting stocks with multiple ways to win is: paramount global (Para -0.76%) (Para.A -0.77%). The stock price has fallen about 86% since its peak. but There are a number of potential catalysts that could lift the stock price after a difficult few years. In fact, one analyst thinks the stock could rise as much as 115%.
Image source: Getty Images.
More than just streaming video
While many investors tend to focus on the company’s streaming video platform, Paramount+, it’s important to take a step back and look at the business holistically to avoid overlooking the valuable portfolio of diverse entertainment that the media company offers. is important.
For the first three quarters of 2023, CBS remained the No. 1 broadcast television network, a record that has stood for 15 consecutive years. Additionally, the network continues to boast some of the most-watched programs on broadcast television. NCIS, Young Sheldon, blue bloodand F.B.I., among others. Additionally, the NFL on CBS achieved its “highest season ratings in years,” the company said.
Paramount Pictures (the company’s film studio) released several major notable films last year, including: Mission: Impossible — Dead Reckoning Part 1 and Transformers: Rise of the Beast.
In turn, the company’s streaming division includes subscription service Paramount+ and ad-supported platform Pluto TV. This media giant offers a wealth of content including his more than 200,000 TV episodes and his 4,000 movies from CBS, BET, Nickelodeon, MTV, Comedy Central, and of course Paramount Pictures. .
Paramount+ also hosts a wide range of programming for sports enthusiasts. The company controls the rights to all local NFL games broadcast on CBS as part of an 11-year multi-platform rights agreement signed in 2021. In 2023, viewers will have access to 38 regular season games and three playoff games. The platform also offers a variety of other sports, including NCAA basketball, PGA golf, and European soccer.
Paramount appears to be moving forward in a tough market environment for streaming services. In the third quarter, Paramount+ revenue increased 61% year-over-year and its audience expanded to 63 million subscribers worldwide. At the same time, average revenue per user (ARPU) increased by 16%. Engagement also increased, as total worldwide viewing time on Paramount+ and Pluto TV increased by 46%.
As a result of these and other improvements, sales were $7.1 billion, an increase of 3% year-over-year, and earnings per share increased 71% to $0.36. Paramount posted profits in each of its major business units, with the exception of its television media division, where the global advertising market continues to be depressed. Perhaps more important to investors is that Paramount generated his $377 million in positive free cash flow after burning cash for four consecutive quarters.
A massive vote of confidence from Wall Street
Late last year, benchmark analyst Daniel Cournos maintained a buy rating on Paramount Global and set a $30 price target, suggesting the stock could rise approximately 115% from where it was trading at the time of writing. suggested that. He’s been surprisingly consistent about the company’s outlook, with a buy rating and $31 price target dating back to early 2023.
The analyst did not provide an updated comment on Paramount Global’s overall outlook, but previously cited a recovery in licensing revenue, an improving advertising environment and a corresponding acceleration in ARPU as reasons for his bullishness. However, he did address reports of a possible merger with. warner bros discovery What appeared last month. If it goes through, analysts believe the deal could generate between $3.2 billion and $4.9 billion in synergies.
Paramount Global has been a hot property lately, and Warner Bros. Discovery isn’t the only company interested in acquiring it. Last week, reports emerged that an investor group led by David Ellison was in talks to buy privately held National Amusements, which owns 77% of Paramount Global. Buying a stock based on acquisition potential is usually a bad idea, but this adds to the evidence that Paramount is currently undervalued.
Paramount Global’s valuation, which has fallen significantly from its peak, is unusually low. The stock is selling for just 12 times forward P/E. This low price is likely a factor in Berkshire Hathaway’s decision to increase its stake in Paramount Global over the past few years. He currently owns 93.7 million shares, worth more than $1.3 billion, or about 14% of Paramount’s outstanding shares.
Paramount Global is one of the Warren Buffett stocks to buy before the rally really takes off, given its growth potential, the value of its multimedia portfolio, and its cheap land price.
[ad_2]
Source link
