US media networks are expected to see another soft quarter in Q1 but there could be an improvement in linear TV ad revenue and modest gains in direct-to-consumer, Macquarie said in a note to clients Monday.
“We anticipate an uninspiring Q1 reporting season from the five media network groups under coverage,” the firm said.
Macquarie said it expects “stagnating” revenue and earnings before interest, taxes, depreciation and amortization for Comcast (CMCSA). The company’s broadband subscribers remain under pressure and it faces tough comparisons in film and parks, according to the note.
Walt Disney’s (DIS) proxy fight is over but Macquarie said it doesn’t see much change in the financial outlook, while Fox’s (FOX) fiscal 2024 estimates look weak on comparison and timing. Paramount (PARA) is expected to strike a merger with Skydance Media soon and Warner Bros. Discovery (WBD) will not see a good start in Q1, according to the note.
Macquarie estimates TV ad revenue to fall 8% year over year in Q1, better than the 14% decline in Q4, and DTC is expected to continue its steady growth at all firms but not enough to drive “enthusiasm” for the stocks.
Macquarie maintained its neutral rating on Comcast, Disney and Fox, underperform rating on Paramount and outperform rating on Warner.