- Share this article on Facebook
- Share this article on Twitter
- Share this article on Flipboard
- Share this article on Email
- Show additional share options
- Share this article on Linkedin
- Share this article on Pinit
- Share this article on Reddit
- Share this article on Tumblr
- Share this article on Whatsapp
- Share this article on Print
- Share this article on Comment
After setting all-time highs in 2013, the stocks of many entertainment industry giants have trended down early in the new year.
MoffettNathanson analyst Michael Nathanson on Tuesday predicted that Hollywood stocks will remain under pressure over the near term, citing weaker-than-expected fourth-quarter cable TV trends that some industry CEOs mentioned at a December conference.
“For the first time in recent memory, some media executives, blaming softer scatter [ad market trends] and weak ratings trends, publicly talked down fourth-quarter advertising expectations,” Nathanson wrote in a report. “While these comments were made back at an investor conference in December, it seems the market only started paying attention when the calendars turned to 2014.”
PHOTOS: Sun Valley Scene: Rupert Murdoch, Brian Roberts, Brian Grazer Arrive at Allen & Co. Retreat
He added: “Year-to-date, we have seen sharp losses at many of the mostly cable-network centric names that are impacted by both poor ratings and weak scatter demand.” For example, Discovery Communications closed 2013 at $90.42, but finished Monday’s trading session at $81.44. That meant a drop of 9.9 percent.
Viacom‘s stock closed 2013 at $87.34, but finished Monday at $84.42, while shares of Walt Disney were down from $76.40 to $73.27 as of Monday night and CBS Corp. was down from $63.74 to $60.94. 21st Century Fox‘s stock over the same period went from $35.17 to $32.35, and Time Warner‘s from $69.72 to $65.47.
Nathanson suggested that the upcoming quarterly earnings season may not provide much of a boost for entertainment stocks.
“We think that first-quarter advertising and ratings trends could be negatively impacted by the Winter Olympics on NBC, which should gain share of viewers and dollars,” he said. “As such, the near-term downward slide in media valuations could likely continue until earnings revision trends improve. Fourth-quarter results will likely not provide that relief.”
Email: Georg.Szalai@THR.com
Twitter: @georgszalai
Related Stories
Related Stories
THR Newsletters
Sign up for THR news straight to your inbox every day