Hollywood Stocks in 2024: The Good, the Bad and the Silver Lining

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In 2022, the stocks of Netflix and most Hollywood studios fell to earth. Then in 2023, major media and technology players had another grim year with investors as faith in streaming took another hit. But in 2024, signs of progress in streaming business profitability and renewed M&A talk helped the stocks of some of the sector biggies.

And heading into 2025, some on Wall Street are striking optimistic tones. “For 2025, we are generally bullish on media,” wrote Bank of America analyst Jessica Reif Ehrlich in a Dec. 19 preview of the new year.

“Dare We Say We’re Optimistic?” Wells Fargo analyst Steven Cahall wrote that same day in his 2025 preview. “This is the best we’ve felt about the broader space since ’21.”

Why is that? “Media is in a more constructive place heading into 2025,” he explained. “Linear risks to ad and affiliate revenue have not abated, but we see meaningful strategic improvement in direct-to-consumer (DTC) performance. Sports is moving into streaming from ESPN and likely Fox, unlocking new market potential. We expect M&A will support valuations in TV broadcast, Warner Bros. Discovery and possibly Lionsgate, at least for a time.”

Media investor sentiment “really began the most recent downturn in early ’22 as DTC fundamentals faltered alongside traditional fundamentals, and the trends listed above mean this is the best we’ve felt about potential outperformance since then,” Cahall concluded. “We believe the ad market is also solid.”

Morgan Stanley analyst Benjamin Swinburne in a Dec. 18 report wrote that in 2024, “the divergence in (sector stocks’) performance was stark between those with secular growth tailwinds – a media & entertainment ‘winner’s circle’ – and those that are more purely cyclical or face secular headwinds.”

But he also remains more cautious than others. “Despite the improved streaming industry outlook and general industry consolidation potential, we do not see a reason to get more bullish on these stocks today,” he added. “The traditional TV headwinds remain significant, TV licensing demand may not fully recover to pre-pandemic levels, and M&A often takes longer to play out than the market expects.”

Netflix, with a 90 percent jump to $891.32, was one of the biggest sector winners of the year, although it was outperformed by Cinemark, which jumped 121 percent. Fox Corp. had a 60 percent gain, and Imax, up 71 percent, was also among the media and entertainment sector stocks that handily outperformed the 23 percent gain in the broad-based S&P 500 stock index.

Despite Netflix’s strong run amid hit content and competitors’ reduced spending, many Wall Street bulls remain optimistic. “Our view remains unchanged that Netflix has won the global streaming race as evidenced by year-to-date results/raised guidance (especially relative to its streaming peers’ results), and this is what, in our opinion, winning looks like,” wrote Pivotal Research Group analyst Jeff Wlodarczak in late November, boosting his stock price target to a Street high of $1,100.

Some are turning more cautious though. Loop Capital analyst Alan Gould, for example, cut his rating on Netflix shares from “buy” to “hold” in mid-December citing the high valuation. “We upgraded NFLX almost 16 months ago on the thesis the competitors raising price and reducing spend further boosting Netflix’s competitive position, Netflix having the largest pipeline of unreleased content and global production going into the strikes, successfully implementing paid sharing, and optimistic on advertising,” he explained. “We believe those issues are largely factored into the stock, and the shares are now approaching fair value.”

Most traditional Hollywood players didn’t match Netflix’s performance and quite a few actually posted declines, as Wall Street continued to eye legacy linear TV networks units as challenged businesses amid cord-cutting and digital competition. That said, moves by Comcast and Warner Bros. Discovery (WBD) signaling they are ready to shed their cable networks operations that could become a deal vehicle to consolidate further parts of the industry drew cheers from some analysts, even though others expressed their doubts.

Walt Disney, rejuvenated since the return of Bob Iger to the CEO role, saw its stock rise 23 percent for the year to $111.35, roughly in line with the broader market. “In 2025, we are confident Disney will realize improved financial performance in its direct-to-consumer (DTC) unit and better-than-expected results in Experiences (theme parks and cruise lines),” CFRA Research analyst Kenneth Leon wrote in a Dec. 26, in which he raised his stock price target by $8 to $128 and boosted his earnings forecasts for the current and next fiscal year. “In our view, DTC has turned the corner to profitable growth with healthy subscriber growth. Sports are a core franchise for live entertainment that needs advertising sponsors to offset sports rights.”

Paramount Global finally reached its deal in 2024 as chair Shari Redstone agreed to give up control in a transaction with a consortium led by Skydance Media, headed up by David Ellison, and RedBird Capital. The merger is expected to close in September, and Ellison and his team have outlined their case for Paramount as a growth story. Paramount shares fell 27 percent though to $10.46.

NBCUniversal owner Comcast, led by chairman and CEO Brian Roberts, became the first entertainment titan to unveil the spinoff of most of its cable networks into a separate entity in late November. Led by Mark Lazarus as CEO, the new company didn’t immediately get a name and was instead referred to as “SpinCo,” with Comcast promising “a new growth trajectory” for all its assets.

Bank of America analyst Jessica Reif-Ehrlich was bullish about the move. “SpinCo could be used as a consolidation vehicle for cable networks across the industry,” she wrote in a report. “This move by Comcast may also reduce regulatory concerns about another attempted potential merger with a large cable peer.”

But some observers wondered about the asset separation. “We question how valuable cable networks would be stand-alone, without ties to NBCU’s studio and streaming capability, and lacking advertising tie-ins,” Macquarie analyst Tim Nollen highlighted after Comcast management first mentioned the possible change.

Comcast’s stock ended the year down 14.4 percent at $37.53.

WBD, led by CEO David Zaslav, followed with a similar move on Dec. 12, saying it would reorganize its corporate structure into a global linear TV division, separate from its streaming and studios division. The new corporate structure aims to bolster its “strategic flexibility and create potential opportunities to unlock additional shareholder value.” Or as Macquarie analyst Tim Nollen emphasized: “The signal seems clear: divestment of the linear networks could be in the cards, following neatly on Comcast’s recently announced plans to spin off most of its cable networks from NBCU.”

Zaslav recently also addressed WBD’s previously stated target of posting $1 billion or more in direct-to-consumer profits in 2025, saying his team was now expecting to meaningfully exceed that, touting “clear results” from the firm’s focus, investment, and patience with streamer Max. WBD’s stock closed the year down 9 percent at $10.57.

Lionsgate, one of the biggest Hollywood gainers of 2023, also lost ground, falling 26 percent to $7.55. 

Meanwhile, Fox. Corp., led by Lachlan Murdoch after his father Rupert Murdoch moved to the role of chairman emeritus, benefited from optimism about its news and sports assets, including Fox News buoyed by a big election year. Fox ended the year at $48.58, up 60 percent this year.

Among smaller entertainment companies, AMC Networks, in its second year under CEO Kristin Dolan, lost about half its value, finishing the year down 48 percent at $9.90.

In contrast, UFC and WWE owner TKO Group, after its creation in September 2023, saw its shares jump for the year, gaining 74 percent to close at $142.11, while Endeavor rose 32 percent on the year to close at $31.29.

Cinema operator stocks had another mixed year in 2024. AMC Theatres-parent AMC Entertainment Holdings saw its shares fall 35 percent to end the year at $3.97, while Cinemark’s stock shot up a massive 121 percent to $30.98. Imax Corp. also rode a box office recovery for Hollywood studios to end the year with its shares gaining 70 percent to $25.59.

Music and audio entertainment stocks mostly lost ground in 2024. Warner Music Group shares fell 13.3 percent to $31.00, the Amsterdam-listed stock of Universal Music Group dropped 4.2 percent to end the year at $24.72, iHeartMedia ended the year where it started to close at $1.98, and satellite radio giant SiriusXM’s stock price ended at $22.80, down 58 percent.

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