Why 'Old School' Media Stocks Are Getting Killed Today
Media stocks sold off broadly on Tuesday morning after news of a sector downgrade from Wells Fargo began to circulate.
Walt Disney Co (NYSE: DIS), 21st Century Fox-A (NASDAQ: FOXA) and CBS Corporation Class B (NYSE: CBS) all traded down more than 1 percent after Marci Ryvicker and her team of analysts cut their view on the diversified media sector to Market Weight. Wells Fargo downgraded Fox, CBS and Disney, which were previously rated at Outperform.
On Disney, the bank said the entertainment has "slowed...but it really isn't broken," TheStreet reports. Wells Fargo also highlighted Disney's lightened guidance for "Star Wars"' international footprint and the coming Shanghai Disneyland park as things to watch going forward.
A Better Play?
Of note, Netflix, Inc. (NASDAQ: NFLX) has significantly outperformed Disney, Fox and CBS year-to-date. The latter three have averaged a return of -5.6 percent in 2015, while Netflix is up 154 percent.
Netflix is just one streaming video alternative to traditional TV networks, but it's arguably the only pure-play available at the moment. Amazon.com, Inc. (NASDAQ: AMZN), which has Amazon Prime, offers investors a far more diversified media and commerce company, while Hulu is not public.
Latest Ratings for FOXA
|Sep 2016||Bernstein||Downgrades||Outperform||Market Perform|
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