A Potential Sale Of This Media Giant Has Been Upgraded By Bank Of America, Citing Strong Assets

There is a possibility that Paramount could be set for big gains in the coming years, according to Bank of America.

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Jessica Reif Ehrlich, an analyst with O'Neill Financial, raised her price target on Paramount shares on Tuesday to $32 per share from $24 per share, which implies a 54.1% increase in value from Tuesday's close.

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Among Ehrlich's comments, he suggested that the company was ready to trade up but that its assets may be useful to it if it ever wanted to sell itself.

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"We are of the belief that PARA has a collection of unique assets that, should it ever be put on the market-whether in parts or full-on, would generate significant buyer interest. It has been reported by the press that at least four qualified buyers are interested in buying BET."

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A 5.4% jump in Paramount's shares in premarket trading on Tuesday added to the company's 23% rise since the beginning of the year, bringing the total gain to about $20 billion.

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Ehrlich said that he was open to the idea that even the downside risk could still turn out to be a positive, no matter how much uncertainty there is surrounding Paramount's ability to successfully make the transition to streaming without neglecting its legacy media operation.

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Paramount can either succeed in pivoting towards streaming through which earnings growth will be accelerated, or the company will have to sell at a premium market price since streaming is expected to grow earnings faster.

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In addition, market factors could increase pressure on Paramount Chair Shari Redstone to proactively sell the company regardless of her stated unwillingness to do so.