Paramount shares jumped more than 10% Tuesday after the company’s third-quarter earnings report and a strategy update from CEO David Ellison and his management team.

The stock topped $16.90, its highest level in two weeks, midway through the session. Trading volume on the Veterans Day holiday was lighter than average. Shares are up almost 50% since the August 7 close of the Paramount-Skydance merger, but they have been flat in recent weeks.

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Paramount’s quarterly revenue came in a bit lighter than Wall Street analysts expected and there were other less-than-scintillating data points in the report. Even so, with the timing of the Paramount-Skydance merger close meaning current management wasn’t in control for the full quarter, the financials were less of a focus than exec comments on strategy.

Ellison said a few things designed to tantalize investors during the company’s earnings call Monday. He acknowledged the company’s M&A options but declined to address any of them specifically. “We really look at this as ‘buy versus build’ and we absolutely have the ability to build,” he said.

With the ink barely dry on the merger of Skydance and Paramount, Ellison & Co. have made three offers to acquire all of Warner Bros. Discovery. For its part, WBD says it is also fielding interest in its studio-and-streaming division and is still considering proceeding with plans to formally split into two companies.

Paramount also increased its target for cost savings from the Skydance deal to $3 billion from $2 billion and said it was significantly increasing its film and TV output. The company also has made dramatic moves in streaming, adding UFC bouts without an extra charge for subscribers, citing the value-add as justification for a price hike due in January.

Wall Street analysts weighed in with generally circumspect reactions to the earnings report, with many emphasizing the long time horizon of M&A. A strategic chess game is playing out among Ellison, WBD CEO David Zaslav and interested parties like Comcast and Netflix. Even once clarity emerges in the coming weeks and months, a proposed combination would usher in yet more uncertainty and transition.

BofA Securities analyst Jessica Reif Ehrlich summed it up in the headline of her note to clients: “Sky High Ambitions But Patience Required is Paramount.” She rates the stock as “underperform” (sell), but upped her 12-month price target to $13 from $11. “There are still many unknowns on the strategic initiatives the company has undertaken and, as evidenced by prior large combinations, restructurings often take years to implement,” she wrote.

Doug Creutz of TD Cowen, who has a “hold” rating on the stock, said the management team did a “credible job” of laying out its vision. “Unsurprisingly,” he added, “the plan is another variant on the old standby ‘cut lots of expenses and make better content.’ Execution will be critical.”

The newly combined company is “off to a promising start,” argued MoffettNathanson’s Robert Fishman, but his note flagged Paramount’s plan to up content spending by $1.5 billion a year and boost Paramount+. “The question that hangs over this approach,” he wrote, “is the level of investment required for the company’s DTC offering to truly compete with the likes of Netflix, Disney, and Amazon – all of which hold a considerable lead in global scale, content output, and engagement. To supercharge its path to DTC scale, we continue to believe M&A is the most likely avenue Paramount Skydance will explore.”

Fishman has a “neutral” rating on Paramount shares.

Guggenheim’s Michael Morris, also neutral on the stock, said Paramount’s increasing of cost savings estimates at the same time it lowers profit guidance gives him “media merger déjà vu.” If and until a WBD transaction materializes, he wrote, Paramount “is running a very similar playbook to that of Warner Bros. post the Discovery combination in 2022, where optimism and increased synergies yield lower financial estimates.”

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