Film & Television Production And Distribution Industry Outlook
Zacks Investment Research | Jan 14, 2019 05:48AM ET
The ZacksZacks Industry Rank , which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gaining confidence in this group’s earnings growth potential. Since Jun 30, 2018, estimates for the current year have moved up from a loss of 48 cents to earnings of $1.52.
Before we present a few stocks that you may want to consider, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms S&P 500 & Sector
The Zacks Film and Television Production and Distribution industry has outperformed both the Zacks S&P 500 composite as well as its own sector in the past year.
The stocks in this industry have collectively rallied 13.2% as against the S&P 500’s decline of 6.7% and the Zacks Consumer Discretionary sector’s decline of 9.7%.
One Year Price Performance
Industry’s Current Valuation
On the basis of trailing 12-month price-to-sales ratio (P/S), which is a commonly used multiple for valuing Film and Television Production and Distribution stocks, the industry is currently trading at 2.17X versus the S&P 500’s 3.03X and the sector’s 2.57X.
Over the past five years, the industry has traded as high as 2.34X and as low as 1.41X, recording a median of 1.92X, as the charts below show.
Price-to-Sales Ratio (TTM)
Bottom Line
Increasing demand for blockbuster movies and TV shows coupled with evolution of distribution platforms due to increased Internet penetration should continue to drive growth. Additionally, technological upgrades are likely to boost customer experience and engagement levels, which is a positive.
Get The News You Want
Here we present a couple of top-ranked stocks:
News Corporation (NWSA): NY-based News Corp (NASDAQ:NWSA). has lost 28.6% in the past year. However, the company has a Zacks Rank #1 (Strong Buy) and average four-quarter positive earnings surprise of 35.75%. The Zacks Consensus Estimate for the company’s current-year EPS has remained unchanged at 19 cents per share over the past 30 days. You can see
Price and Consensus: NWSA
World Wrestling Entertainment, Inc. (WWE): Stamford, CT-based World Wrestling Entertainment Fox has returned 145.5% in the past year. The company has a Zacks Rank #2 and average four-quarter positive earnings surprise of 24.41%. The Zacks Consensus Estimate for the company’s current-year EPS has remained unchanged at 29 cents per share over the past 30 days.
Price and Consensus: WWE
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