Media stocks are important investments, especially as media giants transition from conventional to digital channels and the Trump Media & Technology Group (NASDAQ:DJT), or TMTG, loses more than half its value from a 52-week high of $79.38.
TMTG reported substantial losses for 2023, totaling about $58 million, against revenues of only $4.1 million. Shares fell almost 23% following the loss announcement and have struggled to retain their early highs.
The stock once again fell recently after TMTG filed to issue 21 million more shares. The company’s shares have been referred to as meme stocks, which trade based on social media rather than fundamentals. While reputation might attract investment, it can also cause abrupt company value falls.
The company’s profitability depends on Trump’s public and political character, which might increase risks given his legal issues. Under these circumstances, we will explore three legacy media stocks with double digit upside worth exploring as Trump’s trial continues in New York.
New York Times (NYT)
Given everything going on with the previous President, New York Times (NYSE:NYT) is one of the safest companies for your portfolio because of its substantial effect on the media landscape.
Notably, the NYT is a firm and a stock that prioritizes digital sales, which will be the future vitality of any enterprise. NYT gained 10 million subscribers in Q3 of 2023.
At year’s end, NYT had 10.36 million subscribers, 9.7 million of them digital-only. In the fourth quarter of 2023, it brought in 300,000 paid digital members, which enabled it to reach $1 billion in yearly income from digital subscriptions for the first time.
The corporation wants 15 million users by 2027. This ambitious goal will require improving its digital products and continuing its unique monetization and content delivery tactics. Overall, the New York Times is among the few legacy media stocks that have maintained attractiveness in the digital era; performance and potential are reflected in a healthy upside potential of 13%, based on a $48 price target.
Nexstar Media Group (NXST)
Keep an eye on Nexstar Media Group (NASDAQ:NXST), a media company that is going through an interesting time.
Even with the Fed hiking rates 11 times over a year and a half, NXST did better than most media stocks by beating earnings four times in a row. NXST’s quarterly EPS was $3.76, which was 1% better than Wall Street’s $3.71. The big surprise came in the previous quarter when the diverse media giant beat expert predictions by 425% by making 79 cents in EPS.
Nexstar’s aggressive content approach, including its new show “Good Cop/Bad Cop,” improves its lineup and gives it an edge in terms of programming.
Finally, Roku Originals and partnerships for new CW Network shows use popular media trends and the best digital platforms to make the viewing experience better and make material easier to find.
All of this is important because Nexstar is having many problems. Since the beginning of 2024, management has sold more than $2 million worth of shares; insider selling is rarely seen positively. The FCC says that Nexstar broke the rules for WPIX-TV control.
The company also says it will block users and wants DirecTV to pay more for broadcast rights because of distribution problems. With all of these problems and calls for more business freedom, Nexstar has a lot to deal with.
However, analysts believe a turnaround is possible, projecting a 21% upside for NXST on a $200 price target, despite a 19% six-month rally.
Comcast (CMCSA)
Our talk about media stocks comes to an end with Comcast (NASDAQ:CMCSA), a company that is going through some changes.
Comcast has laid off many workers, mostly in engineering and installation roles, at its Sky division, which has affected about 1,000 jobs. This move follows the trend of people picking streaming services over traditional satellite dishes.
In spite of the layoffs, Comcast’s most recent quarterly results showed a 2.3% rise in revenue.
The Sky layoffs are part of a larger plan to get people to switch from satellite to a better, cheaper way to stream TV over the internet.
Comcast has also raised its dividend 6.9% to $1.24 per share and announced a buyback, which is nothing new since the company boasts 17 years of consecutive dividend hikes. Apart from the consistency of the dividend payments, what will attract most investors is the payout ratio of 29%, which leaves plenty of room for Comcast to grow its dividend. The yield of around 3% is also head and shoulders above the 2.5% sector average.
Clearly, several factors are pulling Comcast in different directions, but signs indicate that its more streamlined business model will enable it to navigate these issues successfully. This is evident from analysts projecting a 26% upside with a $50 price target. Like the NYT and NXST, the stock holds a “Moderate Buy” rating.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.