Wells Fargo upgraded its rating on Paramount Global (PARA) from "Underweight" to "Equal Weight" on Wednesday, also raising the media company's price target to $18. The analysts pointed to potential merger and acquisition opportunities for Paramount in 2024.

Yahoo Finance's Josh Schafer and Brad Smith break down the details of this trending ticker.

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Video Transcript

BRAD SMITH: They are climbing higher today after Wells Fargo upgraded the stock to equal weight from underweight citing a further M&A possibility to come in 2024. The firm also upped its price target from $15 to $18. I mean, this is the M&A chatter that will not end, especially when you've got Shari Redstone in the mix at the end of the day.

JOSH SCHAFER: Yeah. I mean, it's interesting to see the M&A thing or the M&A concept highlighted. Within this note, of course, when you think about Paramount that is something that a lot of people are talking about right now, and who would be the buyer, where would some of the assets go.

I think Paramount is one of the companies to me that is just interesting, Brad, when I think about the diversity of product they've been able to bring to streaming in what a buyer gets right.

BRAD SMITH: Right.

JOSH SCHAFER: You're talking about a streamer that has everything from the NFL to Nickelodeon and is able to offer both of those on a streaming service. We talk a lot about the mix of streamers and what sort of sports they offer, what movies they're offering, what's the original content. And that pitch from Paramount is strong to me.

I mean, you're talking about a company that hosts the Super Bowl, right? That's the largest live sporting event in the country, really in the world. So to be able to get access to some of those points, I think is something that is attractive in terms of streaming M&A that some of the other companies that we talk about, like maybe a Comcast or a Comcast assets, NBC. It's a little bit different when you talk about Paramount. And I think they have a little bit better foothold on something like sports.

BRAD SMITH: Yeah. The focus is going to be on the amount of paying subscribers that they have. But as well, it's going to be on the amount of advertisers that continue to come in, and that was one of the weak spots in the most recent earnings report here too.

So it's a larger question of if there was an M&A opportunity that presented itself that swiftly came forward. Perhaps maybe to end out this year or maybe early next year, what would that combination look like in further shoring up what the subscriber base and the overall demographic of those subscribers looks like across content?

At a time where for much of the production houses, they're just re-initiating a lot of those production starts, as well just to get into next year and make sure that they have a strong content slate, in order to go back to those potential subscribers and say, hey, look at our lineup.

And here's what you're buying into next year and the same selling point for advertisers at the end of the day.

JOSH SCHAFER: And at the same point, we're talking about streaming prices rising.

BRAD SMITH: Right.

JOSH SCHAFER: And not everyone is going to want every single streamer anymore as they get more expensive. So that content library you're talking about feels like it's becoming more and more important.

BRAD SMITH: Absolutely.