What Happened?
Shares of multinational media and entertainment corporation Paramount (NASDAQ:PARA) jumped 3.1% in the afternoon session after the company announced a major film deal with Microsoft-owned Activision to bring the popular “Call of Duty” video game franchise to the big screen.
Under the agreement, Paramount will develop, produce, and distribute a live-action feature film based on the iconic first-person shooter series. The media company stated it aims to deliver an "unforgettable cinematic event" for fans of the video game and new audiences alike. Paramount CEO David Ellison, a self-described lifelong fan of the franchise, emphasized the company's commitment to honoring the brand's legacy. He stated, “We’re approaching this film with the same disciplined, uncompromising commitment to excellence that guided our work on Top Gun: Maverick.” The partnership aims to leverage the massive intellectual property of "Call of Duty," which has been a major franchise since 2003.
After the initial pop the shares cooled down to $14.88, up 2.9% from previous close.
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What Is The Market Telling Us
Paramount’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 5.7% on the news that analysts at Morgan Stanley and Guggenheim expressed a more cautious outlook on the media company's shares. Morgan Stanley lowered its price target on the stock to $10 from $12, while maintaining its 'Underweight' rating. The investment bank noted that the shares currently trade at a valuation above its peers, which it considers elevated relative to its forecast for "flattish" adjusted operating income growth through 2028. Adding to the negative sentiment, Guggenheim downgraded Paramount Skydance from 'Buy' to 'Neutral.' These actions from Wall Street analysts suggest growing concerns about the company's valuation and future performance.
Paramount is up 40.6% since the beginning of the year, and at $14.88 per share, it is trading close to its 52-week high of $16.03 from August 2025. Investors who bought $1,000 worth of Paramount’s shares 5 years ago would now be looking at an investment worth $526.55.
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