Jim Cramer Ranks Major Media Stocks, Disney Comes in First
CNBC’s Jim Cramer has ranked major media stocks, with Walt Disney coming in first, followed by Fox, Warner Bros, and Paramount. According to Cramer, Disney “stole the show” this quarter, reporting better-than-expected earnings after years of struggling. The company also managed to raise its cost-cutting projections by $2.2 billion. Cramer said CEO Bob Iger has taken control of Disney’s narrative, expressing confidence that this quarter is a turning point.
In contrast, Cramer called Warner Bros’ most recent quarter “distinctly suboptimal,” even though it produced “Barbie,” the highest-grossing film of the year. Management said the company won’t be able to pay down its debt as previously planned if the advertising market stays weak. Warner Bros came out of the quarter with $43 billion in debt, and Cramer said the stock won’t perform well if it doesn’t make progress on that front.
Fox, according to Cramer, isn’t the best, but it’s also far from the worst. He said the company’s quarter wasn’t bad, but it also didn’t do much to move the stock, which is still trading below where it was before the report. Cramer pointed out that the company is set to make a “fortune” next year ahead of the election, but its streaming service, Tubi, still isn’t popular in the mainstream.
As for Paramount, Cramer said it has the worst balance sheet of the four, bringing it to the bottom of the list. Even though its streaming service has made progress in terms of profitability, the company’s advertising revenue missed Wall Street’s expectations. To Cramer, Paramount needs lower interest rates and an improved ad market.
Cramer noted that investors were concerned about this sector due to fears that a slowing economy would weaken advertising revenue, coupled with the general idea that there are so many other sources of entertainment competing for consumers’ time.
Disclosure: Comcast was excluded from the list to avoid a conflict of interest. Comcast owns NBCUniversal, the parent company of CNBC. The CNBC Investing Club Charitable Trust holds shares of Walt Disney.