Top Entertainment Stocks To Watch In February 2022
With or without the pandemic, entertainment is an essential part of our daily lives. As such, entertainment stocks continue to be on the watchlists of many investors in the stock market today. As a matter of fact, gaming and entertainment stocks, which trended during the earlier days of the pandemic, could still be a solid play today. This is largely thanks to the highly infectious Omicron variant keeping us at home, relying on digital content for entertainment.
Omicron aside, consumer spending has been on the rise, with GDP rising by 6.9% last quarter, exceeding estimates. What this means is, consumers are spending more and are likely spending it on discretionary items such as entertainment. Hence, it is reasonable for investors to be watching entertainment stocks more closely.
Take Roku (NASDAQ: ROKU) for example. In November, the entertainment company released its third-quarter financials. Briefly, total revenue was $680 million, up by 51% year-over-year. Active Roku users also reached 56.4 million for the quarter, a net increase of 1.3 million users from the previous quarter. Besides that, AT&T’s (NYSE: T) HBO and HBO Max both have a combined number of 73.8 million global subscribers, exceeding company expectations of 70 to 73 million. Despite only being launched in 2020, HBO Max has quickly cemented itself as one of the top streaming services. Given all this, here are the top entertainment stocks to watch in the stock market as February approaches.
Entertainment Stocks to Buy [Or Avoid] This Week
- Bally’s Corporation (NYSE: BALY)
- DraftKings (NASDAQ: DKNG)
- ViacomCBS Inc. (NASDAQ: VIAC)
- FuboTV Inc. (NYSE: FUBO)
Bally’s Corporation is a global casino-entertainment company with a growing omni-channel presence of online sports betting (OSB) and iGaming offerings. As of now, the company owns and manages 14 casinos across 10 states and a horse racetrack. Moreover, Bally’s has access to OSB licenses in 16 states. The company also owns several gaming-related businesses. These include Gamesys Group, Bally Interactive, and SportCaller to name a few. For a sense of scale, the company has approximately 10,000 employees. Last week, BALY stock skyrocketed more than 35% upon the following news.
In brief, Standard General, the largest shareholder of Bally’s with a 21% stake, is looking to fully acquire Bally’s. Namely, the hedge fund is proposing to buy out the company’s outstanding shares for $38.00 per share. This amounts to a takeover of roughly $2 billion. With the potential takeover in the works, could you see yourself investing in BALY stock?
Next, we have another sports betting company, DraftKings. In brief, the company mainly identifies as a digital sports entertainment and gaming company. Its main aim is to offer and provide users with daily sports and sports betting opportunities. DraftKings operates through two business segments, its business-to-consumer segment is essentially a platform for daily fantasy sports, sports betting, and online casino products. On the other hand, its business-to-business segment is primarily involved in the design, development, and licensing of sports betting and casino gaming products.
Last Wednesday, Morgan Stanley (NYSE: MS) analysts upgraded DKNG stock from equal-weight to overweight and maintained a price target of $31. In a note, Morgan Stanley analysts said DraftKings is one of the best-positioned companies in its industry with growth potential.
On top of that, the analysts also expect iGaming and sports betting to be a large and profitable market with few market participants. The note comes as mobile sports gambling exploded during its first weeks in New York. Notably, New Yorkers placed $603 million worth of bets in less than two full weeks of legalized mobile gambling in the state. Accordingly, DraftKings had a $134.3 million handle, according to data released by the New York State Gaming Commission. All things considered, would you bet on DKNG stock?
Viacom is a diversified multinational mass media conglomerate. In short, the company delivers premium content to audiences across traditional and emerging platforms worldwide. For the most part, the company operates through three segments, TV entertainment, Cable Networks, and Filmed Entertainment. The three segments combined come to a total of over 170 networks and reach approximately 700 million subscribers in over 180 countries. Some of its notable brands would include CBS, Showtime Networks, Paramount Pictures, and Nickelodeon among others.
Recently, Viacom announced that it renewed its CBS Television Network affiliation agreement. The aforementioned agreement is with Nexstar (NASDAQ: NXST) subsidiary Nexstar Media and its operating partners in 39 markets across the country. In fact, the combined reach of the 39 markets is 14% of the U.S audience, serving 17.4 million television households.
Ultimately, this agreement will enable the company to drive greater efficiency and expand its footprint. Earlier this month, Deutsche Bank (NYSE: DB) analyst Bryan Kraft gave VIAC stock an upgrade from hold to buy. This is due to the media conglomerate’s positive fundamental developments, improved disclosure, and optionality from industry consolidation. As such, he increased his VIAC price target by $4 to $43, while calling it his “top pick in media.” Given this, will you be watching VIAC stock?
FuboTV is an up-and-coming streaming company. Simply put, the company is a unique player in the streaming industry for being a sports-first live television streaming platform. FuboTV allows its customers to access content through streaming devices and on SmartTVs, mobile phones, tablets, and computers.
Therefore, subscribers will be able to conveniently access a variety of live sporting events all on one platform. Earlier this month, the company reported its preliminary quarter earnings. Diving in, it expects an increase in revenue of 105% to 109% year-over-year. As for its full-year revenue, the company forecasts a spike ranging from 138% to 140% compared to the year before.
Fubo also recently secured exclusive U.S rights to stream select UEFA soccer matches, one of the most highly anticipated annual soccer leagues. In addition, it also secured exclusive rights to stream the Premier League in Canada for the next three seasons. Seeing that the Premier League is the top soccer league in England, Fubo now has exclusive rights to two of the biggest soccer leagues out there. Ultimately, this would help strengthen the company’s position in the market as a sports-first live TV streaming platform. And on that note, will you be buying FUBO stock?
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