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Chicago, IL – January 24, 2023 – Today Zacks Equity Research announced that Live Nation Entertainment, Inc. I will discuss. LYV, Royal Caribbean Cruises Ltd. RCL and Madison Square Garden Entertainment Corp. MSGE
Industry: Recreation and entertainment services
Link: https://www.zacks.com/commentary/2042547/3-stocks-to-buy-from-leisure-recreation-services-industry
Zacks benefits the entertainment and leisure services industry from a range of business process optimizations, strategic partnerships and digital initiatives. The ongoing demand for concerts and follow-up venues from cruise operators is helping the industry. According to Live Nation Entertainment, Inc. Current industry players include Royal Caribbean Cruises Ltd. and Madison Square Garden Entertainment Corporation. They have a chance to win at home for the reasons stated above. However, the industry is burdened by high costs and a sluggish US economy.
Industry description
The Zacks Entertainment and Leisure Services industry includes a variety of entertainment service providers, such as cruise liners, entertainment and media owners, golf-related entertainment and leisure businesses, theme park developers, resort operators and event planners. Some industry players are in the ski and sports business, while others operate health and wellness centers on cruise ships and resorts.
Many companies are involved in hospitality and related businesses. Several industry players provide weight management products and services. These companies thrive mainly through general economic growth which increases consumer demand for products. Demand, which is highly dependent on the business cycle, is driven by a healthy labor market, rising wages and increased disposable income.
3 Trends Shaping the Future of the Entertainment and Entertainment Industry
Cruise operators continue to recover as the cruise industry has been hit hard by the coronavirus . However, cruise operators are slowly recovering as they resume flights. Strong demand for cruises, increased bookings and easing of Covid-related protocols bode well for cruise operators.
The shutdown of shipping operations in China is hurting the industry. Cruise operators could be hurt by uncertainty over Russia's intervention in Ukraine. Geopolitical events have pushed up the oil curve. Because of the war, most of the ship operators decided to stop their operations in Russia.
Amusement park operators and amusement companies bounce back The amusement park industry, brought to a halt by the coronavirus pandemic, benefits from strong demand Amusement park operators benefit from increased availability. Consumer spending on amusement parks is increasing. Live entertainment companies have reduced demand for live events and ticket sales are strong.
US Economic Recession Risk : An economic recession can affect the industry. There is a fear of a possible global recession in the stock market. In the United States, inflation is the biggest challenge to the economy. The Fed has indicated it will cut interest rates if there are further signs of weakening inflation. However, it continues to support higher interest rates into 2023.
The December 2022 Consumer Price Index (CPI) was 5.7%, followed by 8.2% in September and 8.3% in August. However, the number is far below the Federal Reserve's 2% target for a strong economy. Inflation leads to higher costs in terms of labour, compensation, health care, delivery and rent.
Zacks Industry Ratings for Great Expectations
The Zacks Entertainment and Leisure Services industry is divided into the larger Zacks Consumer Domain. 70 on the Zacks Industry Ranking, placing it in the bottom 28% of the Zacks industry's 251.
The Zacks Industry Rating, a Zacks rating of all member stocks, indicates a bright near-term outlook. Our research shows that the top 50% of the Zacks Ranked industry is worth twice as much as the bottom 50%.
The industry's position in the bottom 50% of all Zack Rating industries is the result of negative earnings estimates for all member companies. Looking at the revised gross profit estimates, analysts feel confidence is gradually increasing in the group's earnings. Industry losses fell 1.2 percent from November 30 this year through 2022.
Before presenting a few stocks for investors to watch, let's take a look at the industry's recent stock performance and valuations.
The industry is lagging behind the S&P 500.
Zacks Entertainment and Leisure Services Industry outperformed the Zacks S&P 500 Composite and the sector last year. Over the past year, industrial stocks have fallen 26.5% overall and 20% in the broader sector. The S&P 500 fell 11.2% during that period.
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The industry is trading at 9.71X the S&P based on a 12-month EV/EBITDA (company value/before interest and depreciation), which is typically used to value debt-laden entertainment stocks. 500 10.26X and Sector 8.04X. Over the past five years, industry quotes have ranged from 195.37X to 5.77X, with a median of 12.21X.
3 entertainment and entertainment services worth betting on for promotion
Live Nation Entertainment : Headquartered in Beverly Hills, California, Live Nation Entertainment is a live entertainment company. The company is benefiting from strong demand for live streams and ticket sales. This will increase the demand for digital tickets and lead to the growth of contactless transactions.
Zacks' Ranked #2 (Buy) Company is down 31% over the past year. This year in 2023, the company's sales and profits will increase by 3.9% and 144.9% compared to last year's expectations. You can see the full list of today's #1 Zach Ranked promotions here .
Royal Caribbean : The company is headquartered in Miami, Florida. The company benefits from higher demand for cruises and increased booking volumes. The company's focus is both on technology innovation initiatives and product development. In the third quarter, the company reported an acceleration in demand for yachts in 2023.
The #2 Zacks ranked company's stock has fallen 20% over the last year. This year in 2023, the company's sales and profits will increase by 43.3% and 137.9% compared to last year's expectations.
Madison Square Garden Entertainment : The company is engaged in the entertainment business. The company is benefiting from strong demand in the entertainment segment. The company says it's seeing strong demand for its portfolio of properties and brands.
The #2 Zacks ranked company shares are down 33.3% over the past year. In FY2023, the company's sales and profits are expected to grow by 13 percent and 65.6 percent year-on-year.
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Royal Caribbean Cruises Limited (RCL): Free Stock Analysis Report
Live Nation Entertainment Inc. (LYV): Free Stock Analysis Report
Madison Square Garden Entertainment Corporation (MSGE): Free Stock Analysis Report
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