this media stock is worth buying despite the advertising slowdown

Media stocks are no longer the darlings they were amidst the pandemic, especially after Snap Inc confirmed last night that advertising was indeed slowing down materially.

Still, Cerity Partners’ Jim Lebenthal says there’s one name that continues to be worth owning, especially for the long-term investors.

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Lebenthal likes Paramount stock

What he’s bullish on is Paramount Global (NASDAQ: PARA) – in stark contrast to MoffettNathanson that downgraded the stock today. Explaining why on CNBC’s “Halftime Report”, he said:

You got a stock here that’s trading at less than 12 times earnings, 70% of book value. And last quarter, they added 6.0 million subscribers to Paramount Plus. This is when Netflix grew not at all.

The entertainment conglomerate is set to report its current quarter earnings on August 4^th. Estimate is for them to add another 3.0 million paid subscribers this quarter and Lebenthal even finds that conservative.

The long-term story is still positive

The stock is down more than 30% from its year-to-date high, so it does look attractive in terms of valuation. Lebenthal agreed the hit to ad-spend will be a near-term challenge for Paramount Global, but said:

I’m in this stock because in 2024, they’re well on track to exceed their target of 100 million subscribers. They’re growing their business, they’re investing in the future, they have the cash to do it. They have positive free cash flow.

Its “premium” subscription also costs less than the likes of Netflix that, theoretically, makes it a better pick for a looming recession. Last week, Paramount CEO Bob Bakish also said the multinational was well-positioned to benefit from the “rapidly growing” streaming space.