Investors this 12 months had bid up shares of legacy tv content material firms as these corporations shifted their companies to direct-to-consumer streaming video providers. But these leisure shares have fallen sharply in current days as Wall Street analysts have turned bearish.
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On Friday, Wells Fargo analyst Steven Cahall downgraded three leisure shares: AMC Networks (AMCX), Discovery (DISCA) and ViacomCBS (VIAC). He lowered his scores on AMC and ViacomCBS to underweight from equal weight. Cahall moved to equal weight from obese on Discovery. He lower his value targets on all three.
Valuations had been prolonged for the three due to investor enthusiasm for his or her streaming methods, Cahall stated in a be aware to purchasers.
“We think primarily nonfundamental investing drove massive rallies recently in AMCX, DISCA and VIAC,” Cahall stated. “The companies are better off than they were in 2020 due to DTC (direct to consumer), but there’s too much risk to justify the recent valuations.”
Entertainment Stocks Take A Tumble
In afternoon buying and selling on the stock market today, AMC inventory sank 13.5%, close to 52.70. On March 15, it notched a greater than 5-year excessive of 83.63.
Meanwhile, Discovery tumbled 23.3%, close to 44.30, and ViacomCBS fell 21.6%, close to 52. Discovery hit an all-time excessive of 78.14 on March 19. ViacomCBS reached a document excessive of 101.97 on March 15.
Elsewhere amongst leisure shares, web tv chief Netflix (NFLX) rose 0.2%, close to 503.85. Netflix inventory hit its all-time excessive of 593.29 on Jan. 20.
On Thursday, analysis agency MoffettNathanson downgraded ViacomCBS to promote from impartial. It lower its value goal on VIAC inventory to 55 from 67.
Discovery, ViacomCBS Called ‘Overvalued’
Among different leisure shares, MoffettNathanson reiterated its purchase scores on Discovery and Fox (FOXA). It has impartial scores on AMC, Netflix and Walt Disney (DIS).
On Tuesday, funding financial institution UBS downgraded Discovery to promote from impartial on valuation. It maintained a promote score on ViacomCBS.
Last week, Macquarie Research referred to as Discovery and ViacomCBS “overvalued” and downgraded each shares to underperform from impartial.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for extra tales on client know-how, software program and semiconductor shares.
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