Goldman Sachs assessed the U.S. media landscape in a note Tuesday, launching coverage of several major players.
Their rankings prioritize companies with strong “competitive moats” that can navigate the current industry transition.
These moats include a reduced reliance on television entertainment networks, a focus on sports and news, a strong brand portfolio and direct-to-consumer (DTC) profitability.
Goldman gives Walt a Buy rating. Disney (NYSE:) and Fox Corporation (FOXA). The bank said Disney’s portfolio of content and sports rights provides strength to Disney’s entertainment and sports segments, while significant investments in theme parks provide unique growth potential.
Fox’s focus on news and sports through channels like Fox News and FS1 helps the company stand out in an increasingly crowded streaming landscape.
Comcast (NASDAQ:) also received a Buy rating despite challenges in its cable and broadband segments. Analysts acknowledge these headwinds but believe the stock has them priced in. They highlight Comcast’s ability to generate strong free cash flow and strive to grow shareholder returns.
Paramount Global (PARA) received a Sell rating due to its heavy reliance on general entertainment and a less clear path to profitability for its Paramount+ streaming service. In addition, analysts see fewer “shutter brands” that Paramount can leverage across multiple revenue streams compared to competitors.
Warner Bros. Discovery (NASDAQ:) received a Neutral rating. While WBD boasts an extensive content library and sports rights, pending NBA rights negotiations and entertainment television involvement create uncertainty.
Stagwell Inc (STGW) also received a Neutral rating. This advertising agency is benefiting from its focus on technology clients, resulting in faster growth. However, analysts expect increased competition in the digital advertising space, which could potentially impact Stagwell’s long-term organic growth.