Entertainment stocks like TTWO, LYV, and DIS have thrived over the past year despite a still challenging macro environment. With the economy showing signs of resilience and consumers having a chance to save a little more of their disposable income for fun and experiences, I expect the entertainment scene to build on its recent momentum. Masu.
In fact, only time will tell if they will hit a new all-time high next time. Either way, each of the stocks below has the confidence of Wall Street, with most analysts recommending them as buys. So use TipRanks' comparison tool to compare and contrast each entertainment play to see which Wall Street is most bullish on.
Take-Two Interactive (NASDAQ:TTWO)
First, let's take a look at the at-home entertainment play Take-Two Interactive. The company has been looking to gain momentum over the past year after giving up most of its pandemic-era gains in 2021 and 2022. Without a doubt, reopening the economy meant video. Gaming companies were once again forced to compete with theme parks, concerts, and other “real world” forms of entertainment.
But as inflation and layoffs could continue to weigh on consumer balance sheets, I think home entertainment stocks could start to dominate again.
When it comes to Take-Two, it has a much-needed feature. Grand Theft Auto VI (GTA VI) is set to be released and looks to entertain gamers with the next generation of immersive, open-world blockbuster titles, so they may be able to make the most of the opportunity at hand.
The amazing water physics and gorgeous scenes shown in the game's first trailer have everyone excited and ready to give Take-Two their money. I share that enthusiasm and remain bullish on the name, regardless of when GTA VI actually releases.
In any case, Take-Two stock has taken a dive recently due to news that GTA VI may be delayed.according to KotakuSuch a delay could push the title back from 2025 to late 2025 or 2026. It is hoped that the return-to-office order issued by Take-Two will help minimize potential delays.
Even if GTA VI hadn't been released for another two years, I don't think the recent 4.2% daily drop would have been justified. This speaks to the short-term focused nature of some profit-seeking investors. Most of them are currently out of stock, so those who are thinking long-term may have the opportunity to pick up some great entertainment pieces at a small discount.
If you have a five-year horizon, does it really matter if TTWO's blockbuster isn't released a few months later than expected? Probably not.
What is the target price for TTWO stock?
According to analysts, TTWO stock has been assigned 18 buys and 3 holds over the past three months, making it a strong buy. TTWO's average price target of $178.86 implies an upside potential of 20.45%.
Live Nation Entertainment (NYSE:LYV)
Live Nation Entertainment is probably the best way to bet on live music and real-world experiences. Sure, the Metaverse and everything else is trying to recreate the feeling of going to a concert. But don't expect the next generation of spatial computers to eat up demand for Taylor Swift tour tickets anytime soon, or indeed ever.
Live Nation is the undisputed king of live entertainment, and as such deserves a premium price (80.7x trailing price/earnings) and a bullish view from analysts. I share their bullish stance as stock prices begin to rebound in earnest.
Earlier this year, RothMKM's Eric Handler upgraded LYV stock to “buy from hold,” raising his price target by about 23%. Handler is a big fan of the demand trajectory, noting that the company appears poised for “above-trend” growth going forward.
Popular concert tickets are incredibly expensive, but audiences seem willing to pay high admission prices for such an unforgettable experience. In fact, there's nothing like a great show from your favorite artist.
In other words, Live Nation is a low-tech entertainment giant with a moat that even next-generation technology can't break through. With plenty of big events coming up besides Taylor Swift's Elas Tour (think Creed reunion tour), look for Live Nation to continue its strong growth.
What is the target price for LYV stock?
LYV stock is a Strong Buy according to analysts, with 14 unanimous Buy assignments over the past three months. LYV's average price target of $120.38 suggests upside potential of 13.8%.
Disney (NYSE:DIS)
Disney stock is finally on the upswing, with shares up about 25% over the past year. New highs are yet to be seen, but I think the potential election of Nelson Peltz to the board could provide the stimulus the media and entertainment giant was looking for. CEO Bob Iger definitely had plenty of time to work his magic. So far, the only magic investors have to look forward to is executive changes.
Beyond management changes, there are some interesting and potentially overlooked catalysts that could help sustain DIS stock's recovery. From investing in incremental theme park capacity expansion to leveraging Epic Games' Fortnite to level up, I believe there's enough impetus to get excited about Disney again.
Oh, and let's not forget that as live sports distribution and streaming reaches its peak, ESPN assets could be monetized more effectively. I'm bullish, as many analysts consider the company a buy.
Without a doubt, theme parks have been a strength for Disney lately. By betting big on capacity expansion, the company stands to welcome more visitors at once and reap big profits. Many visitors are willing to pay a considerable amount of money for admission. Epic Games' investment is a bit of a wild card, but we can't help but imagine what Disney has in store in the distant future as it tries to push further into the Metaverse.
When it comes to Metaverse-style play that resonates with young people, you can't overlook Fortnite. As Disney continues to put money into the right areas (gone are the days of rampant spending on Disney+), I think a recovery is probably only a matter of time. And with Mr. Peltz joining the board, Disney's recovery efforts will likely accelerate a bit. He is a smart activist and someone who can add plenty of value to a legendary media and entertainment giant.
What is the target price for DIS stock?
According to analysts, DIS stock has been dominated by buys, with 21 buys, 3 holds, and 1 sell over the past three months. DIS's average price target of $123.21 suggests upside potential of 2.2%.
Take-out
As consumer sentiment improves, perhaps value investors may want to buy the aforementioned Buy rated stocks while the recovery continues. Of the three companies, analysts believe TTWO stands to gain the most over the next 12 months.
disclosure