Zacks Industry Outlook Highlights Disney, Atlanta Braves and Madison Square Garden Entertainment

For Immediate ReleaseChicago, IL – May 15, 2025 – Today, Zacks Equity Research discusses Disney DIS, Atlanta Braves Holdings, Inc. BATRK and Madison Square Garden Entertainment Corp. MSGE.Industry: MediaLink: https://www.zacks.com/commentary/2470189/3-media-stocks-to-buy-from-a-prospering-industryThe Zacks Media Conglomerates industry is flourishing, driven by the consumer shift toward over-the-top (OTT) content. Major players like Disney, Atlanta Braves Holdings, Inc. and Madison Square Garden Entertainment Corp. are aggressively investing in developing original music, shows and fresh content to captivate and retain Gen Z and millennial subscribers. Moreover, the industry's prospects are bolstered by the availability of cost-effective alternative packages, such as skinny bundles, designed to entice consumers with lower prices compared to traditional offerings.Conversely, the industry grapples with waning broadcast television ratings and diminishing demand for home entertainment sales of theatrical content. Furthermore, advertisers' tepid spending amid rampant inflation and elevated interest rates poses a formidable concern for industry players.Industry DescriptionThe Zacks Media Conglomerates industry encompasses companies engaged in creating and distributing various content forms, from entertainment to educational materials. These firms also offer travel and consumer products. The industry is adapting to the shift toward OTT content, both subscription-based and ad-supported. Advertising remains a key revenue source, while the metaverse presents new opportunities.Subscription price increases, driven by growing subscriber numbers, offer potential revenue growth. However, the industry faces challenges that include declining broadcast TV ratings, reduced demand for home entertainment versions of theatrical releases, and increasing cord-cutting trends. Despite these obstacles, media conglomerates continue to evolve, leveraging new technologies and consumer preferences to maintain their market position.3 Trends Shaping the Future of the Media IndustryOriginal Content Driving Growth: Media companies' capacity to generate advertising revenues beyond traditional TV platforms, such as websites and other digitally consumed channels, unlocks increased opportunities for targeted advertising. The growing consumer preference for subscription services over linear pay-TV and rental or outright purchases has compelled industry players to adapt their business models. Media companies are innovating with original content to attract and retain subscribers.High-Speed Internet Demand Acting as a Key Catalyst: The burgeoning demand for high-speed Internet, including broadband, has benefited media industry participants. Improving Internet speed has fueled the demand for high-quality videos and the trend of binge-watching. Furthermore, a strengthening broadband ecosystem in international markets, coupled with the proliferation of smart TVs, is expected to drive growth.Cord-Cutting and Matured PayTV Industry Hurting Prospects: The media television industry is undergoing a rapid evolution of distribution platforms, embracing new players and advanced technologies. The declining profitability of residential video services due to rising programming costs and retransmission fees has made survival challenging for traditional companies. Additionally, the heightened demand for on-demand content has led to the mushrooming of streaming service providers, making it increasingly difficult for traditional media television companies to maintain their viewer base.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Media Conglomerates industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #44, which places it in the top 18% of more than 245 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates continued outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential.Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Underperforms the Sector, Lags the S&P 500The Zacks Media Conglomerates industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.The industry has returned 4.9% in the above-mentioned period compared with the broader sector’s growth of 15.8%. The S&P 500 has risen 10% during the same time frame.Industry's Current ValuationOn the basis of the trailing 12-month P/S, a commonly used multiple for valuing media companies, we see that the industry is currently trading at 1.51X compared with the S&P 500’s 5.33X and the sector’s 2.28X.Over the past five years, the industry has traded as high as 2.88X and as low as 1.1X, with a median of 1.44X.3 Media Stocks to BuyAtlanta Braves Holdings: This Zacks Rank #1 (Strong Buy) company presents a compelling investment opportunity. In the recently reported first-quarter 2025 results, total revenues grew 27% year over year to $47 million, with baseball revenues increasing 30% to $29 million and mixed-use development revenues rising 23% to $19 million. The company maintains a healthy cash position of $244.7 million and has access to $275 million in untapped liquidity through two baseball revolvers, providing significant financial flexibility. You can see the complete list of today’s Zacks #1 Rank stocks here.The Battery Atlanta development continues to attract premium tenants, with Shake Shack announcing both a flagship restaurant and its second U.S. support center, while the acquisition of Pennant Park adds strategic diversification and recurring revenue streams. On the baseball front, early ticket sales have been robust with seven sellouts already this season, and upcoming high-profile events like the MLB All-Star Game and Speedway Classic should boost visibility and revenues.The Zacks Consensus Estimate for the company’s 2025 earnings is pegged at a loss of 54 cents per share, unchanged over the past 30 days. BATRK shares have risen 8.2% year to date.Disney: This Zacks Rank #2 (Buy) company warrants investor attention in 2025 following its outstanding second-quarter fiscal 2025 results, which demonstrated robust execution across all business segments. The company has successfully navigated the streaming transition, with Disney+ and Hulu reaching profitability while growing to 180.7 million combined subscriptions. This achievement, coupled with a powerful content pipeline featuring upcoming blockbusters like Avatar: Fire and Ash and Zootopia 2, positions Disney for sustained growth.The Experiences segment continues to thrive with domestic Parks operating income up 13%, while the expansion of Disney Cruise Line and unprecedented global park development projects create additional growth vectors. ESPN's record viewership and forthcoming direct-to-consumer platform further enhance Disney's digital transformation story.Trading at a discounted 19.25 times trailing earnings — below the industry average of 21.37 — Disney offers exceptional value with its raised guidance projecting 16% EPS growth and $17 billion in operating cash flow for fiscal 2025. This combination of profitable growth, strong franchises, and attractive valuation makes Disney a compelling buy for long-term investors.The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has moved north by 3.8% to $5.69 per share over the past 30 days. DIS shares have returned 0.1% year to date.Madison Square Garden Entertainment: This Zacks Rank #2 company continues building momentum backed by strong financial performance and strategic positioning. The company's third-quarter fiscal 2025 results demonstrate robust growth with revenues up 6% to $242.5 million and adjusted operating income surging 50% to $57.9 million year over year. MSGE continues to show financial discipline through its share repurchase program, buying back $40 million in stock year to date.The company's diverse revenue streams — spanning iconic venues like Madison Square Garden and Radio City Music Hall — are bolstered by high-profile partnerships with brands like PepsiCo and Liquid Death. The record-setting Christmas Spectacular generated more than $170 million across 200 performances, with strong advance sales for the upcoming season. With solid concert bookings projected for fiscal 2026, continued growth in premium hospitality offerings, and management's confidence in delivering mid-to-high single-digit AOI growth, MSGE is well-positioned to continue creating substantial shareholder value.The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has remained steady at $1.15 per share over the past 30 days. MSGE shares have returned 5.7% year to date.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Walt Disney Company (DIS): Free Stock Analysis Report Atlanta Braves Holdings, Inc. (BATRK): Free Stock Analysis Report Madison Square Garden Entertainment Corp. (MSGE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks