September 6, 2022, World Wrestling Entertainment (NYSE: WWE) and Live Nation Entertainment, Inc. (NYSE:LYV)
These two entertainment juggernauts have all the catalysts in the world pushing them as the best stocks to buy now.
Just because American markets were closed on Labor Day doesn’t mean the world slept. As U.S. markets closed a third straight down week, Russia put a final nail in the coffin for European recession worries. While we enjoyed BBQ and a long weekend, Putin shut down the Nord Stream 1 pipeline and gas flows to Europe. Yet as investors trembled in fear from an imminently worsening energy crisis and recession, entertainment names like World Wrestling Entertainment (NYSE: WWE) and Live Nation Entertainment, Inc. (NYSE:LYV) continued building their cases as the best stocks to buy now.
Something big happened in Europe this weekend besides the Nord Stream news. WWE sold out a 60,000-person stadium in Wales for its Clash at the Castle Pay-Per-View event. The event garnered rave reviews and indicated that the WWE is hot as lava. Despite longtime Chairman Vince McMahon’s misconduct allegations, hush money payments, and retirement this summer, the Company has been on a roll with surging ratings, outstanding earnings, a refreshing creative direction, and stronger-than-ever ticket sales. With the stock trading around two-year highs, there are also whispers of it being an attractive acquisition target.
Live Nation is in a similar realm as the WWE. Which Company, after all, do you think is responsible for facilitating WWE’s ticket sales? Live Nation has consolidated the live events industry and created what amounts to somewhat of a monopoly, just as the WWE did with pro wrestling. Although the stock remains deeply in correction territory, it just reported its best quarter ever. Moreover, as it exceeds pre-pandemic numbers, this giant continues evolving with a potential 56.18% upside.
Market concerns are justified, but there are still promising opportunities. Do not sleep on WWE and LYV as the best stocks to buy now.
World Wrestling Entertainment (NYSE: WWE)
Trading around 2-year highs and with soaring ratings, robust ticket sales, and acquisition rumors, pro wrestling’s biggest player could move another 32.74%.
The gas crisis overshadowed the WWE’s huge European weekend. But that’s why we’re here to show why WWE is one of the best stocks to buy now.
The WWE held its “Clash at the Castle” event in front of 62,000 rabid fans at Principality Stadium in Cardiff, Wales Saturday (September 3, 2022). It was the WWE’s first premium live event in the UK since SummerSlam 1992 and marked former wrestler and new EVP and Head of Creative Paul “Triple H” Levesque’s first premium live event since taking over.
He passed his first test with flying colors.
The WWE had a rough summer. Longtime Chairman and CEO Vince McMahon retired following misconduct allegations and roughly $12 million in hush money payouts to several women.
However, perhaps it was a blessing in disguise for the Company. WWE reported its best-ever Q2 and continues firing on all cylinders.
WWE’s Super Bowl, WrestleMania, for instance, is already sold out. Wrestlemania 39, which doesn’t take place until April 2023, sold all 90,000 tickets in one day. This figure represents the highest sold ticket event in WWE history and a 42% increase over first-day sales for WrestleMania 38.
TV ratings are also at their highest level in years.
With the WWE stock around a 2-year high and up almost 39% in 2022, this red-hot Company could continue its momentum. A Loop Capital $90.00 price target from August 3, 2022, gives the stock an almost 33% upside.
It’s also one of the best stocks to buy now because there are whispers that it could get acquired. We have the scoop, so read on to find out more.
The Most Successful Q2 in Company History Could be a Sign of Things to Come
Weeks after the McMahon news broke, WWE reported Q2 2022 results on August 16, 2022. It exceeded even the most bullish expectations and marked the most successful Q2 in WWE history.
EPS came in at $0.59, beat analyst estimates by $0.04, and marked a 40.48% year-over-year increase. Revenue was just as impressive, rising 23.6% year-over-year to $328.2 million, beating analyst estimates of $322.38 million.
Moreover, adjusted operating income before depreciation and amortization (OIBDA) increased 34% to $91.5 million. That’s why WWE raised its full-year adjusted OIBDA guidance to $370 to $385 million.
This outstanding quarter could be a sign of even better things to come. Earnings for World Wrestling Entertainment could grow by 11.65% in the coming year, while net income may rise by 19.5%. Revenue could also increase at an 8.5% 5-year CAGR.
Entering the Ring With Outstanding Fundamentals
WWE is the face of sports entertainment, and its fantastic fundamentals add some context as to why it’s mainly run uncontested for the last two decades.
First and foremost, its 7 out of 9 Piotroski Score indicates healthy Liquid Balance Sheets, Profitability, and Operating Efficiency.
Its margins also look flawless and indicate that the Company continues to charge forward no matter who’s running it.
Moreover, cash flows can sufficiently cover interest payments and operate with a 3.1% free cash flow yield.
While WWE isn’t a stock known for its dividend, it still has a 2.7% shareholder yield and a solid 0.7% dividend yield.
But from a fundamental perspective, we’re not the only ones considering WWE one of the best stocks to buy now. The Company aggressively bought back nearly 170,000 shares in Q2 at around $58.70 per share.
A Potential Acquisition Target
Although Vince McMahon is technically retired, he still owns roughly 80% of WWE’s stock and maintains voting control. Historically, he has nixed any potential acquisition attempts and would still have the final say. But times could change with him no longer in the public eye and forced into exile.
WWE could be as hot as ever thanks to its licensing deal with Peacock, Comcast’s streaming platform. With Peacock, WWE saw its highest viewership for its last four Pay-Per-View events in Company history. It also marked year-over-year viewership increases ranging from 17% to 49%.
To be outright acquired by Comcast is a logical conclusion, but other content-hungry media giants like Disney, Apple, and Netflix may lurk in the water.
We all know what happens to stocks when rumors of acquisitions leak. That alone is one of the reasons WWE is one of the best stocks to buy now. Stay tuned.
The Technicals Also Signal BUY
Besides the fundamentals and acquisition catalysts, Barchart gives the stock an overall 72% BUY rating and 100% BUY rating for the medium-term and long-term based on 13 technical indicators. The stock research platform highlights the following technicals flashing BUY signals:
- 20 – 50 Day MACD Oscillator
- 20 – 100 Day MACD Oscillator
- 20 – 200 Day MACD Oscillator
- 50 Day Moving Average
- 50 – 100 Day MACD Oscillator
- 50 – 150 Day MACD Oscillator
- 50 – 200 Day MACD Oscillator
- 100 Day Moving Average
- 150 Day Moving Average
- 200 Day Moving Average
- 100 – 200 Day MACD Oscillator
WWE Could Continue Rallying 30+%
9 Wall Street analysts offered 12-month price targets for WWE in the last 3 months. The stock currently has a high price target of $94.00, a low of $50.00, and an average of $76.63. The average price target represents a $13.02% upside from September 2, 2022’s closing price of $67.80.
Based on Finbox’s Fair Value model, the stock’s real upside could be almost double this! Based on its proprietary metrics, the financial research portal gives WWE an $82.85 price target, representing a 22.20% upside.
However, this still could be conservative. In August, the following analysts boosted price targets giving the stock as much as a 32.74% upside.
- Loop Capital- $90.00
- MKM Partners- $84.00
- Citigroup, Benchmark- $83.00
WWE’s year-to-date low and high are $47.71 and $75.23, respectively.
Live Nation Entertainment, Inc. (NYSE:LYV)
The potential for triple-digit earnings growth and a 30+% upside make this live entertainment powerhouse look like one of the best stocks to buy now.
Live Nation is a live entertainment ticketing and promotion powerhouse. It is arguably the most prominent player in the entertainment industry and a long-term outperformer.
Yet despite recently reporting its best-ever quarter, exceeding pre-pandemic numbers, and consolidating its operations while disrupting other sectors such as live-streaming and e-commerce, the stock trades over -29% below its 2022 highs and at a mouth-watering level.
The reasons for Live Nation being one of the best stocks to buy now go far deeper than simply trading at a discount despite a record-setting quarter. The potential for its earnings and net income to soar triple-digits is legitimate.
There’s a reason why Benchmark sees the stock moving over 56+%.
Its Best Quarter Ever Could Springboard Triple-Digit Earnings and Net Income Growth
On August 4, 2022, Live Nation reported its best quarter in history and told the investment world that the pandemic era was over.
Q2 EPS came in at $0.66, beat consensus analyst estimates by $0.14, and marked a nearly 7x year-over-year increase from Q2 2021’s negative EPS. Revenue also rose a jaw-dropping 670% year-over-year to $4.43 billion, clobbering analyst estimates of $3.92 billion.
A further breakdown of its bottom and top line figures reveals even more noteworthy trends.
- International sales accounted for 60% of Live Nation’s growth- its highest ever quarterly figure.
- Its Ticketmaster segment had a record quarter. Adjusted operating income (AOI) increased over 86% year-over-year, and transacted gross transaction values (GTV) grew 76% year-over-year.
- Double-digit revenue increases at all venue types.
- Fan spending grew by over 20% at all venues.
- Exceeded pre-pandemic figures from Q2 2019.
- Live Nation promoted over 12,500 concerts for 33.5 million fans, a 20% increase.
- Average ticket prices increased by 10%.
- Revenues grew over 40%
Moreover, with demand for its largest pipeline of artists as strong as ever, Google, Amazon, and Hulu are now sponsorship clients.
The potential for Live Nation to continue this momentum into the future is genuine. Earnings for Live Nation could explode by 235.00% in the coming year. Net income could also grow 125.1% and at a 67.7% average over the next five fiscal years.
A STRONG BUY That Could Run 56.18%
Tipranks rates LYV a STRONG BUY because 4 out of 5 Wall Street analysts who offered 12-month price targets in the last 3 months rated it as such. LYV has a street-high price target of $140.00, a low of $100.00, and an average of $117.23. The average price target represents a 30.52% upside from its September 2, 2022, closing price of $89.64.
The $140.00 price target might be more relevant over the next few months, with Live Nation’s numbers setting records. Benchmark, after all, gave the Company this price target on August 15, 2022. This figure represents a potential 56.18% upside.
LYV’s year-to-date low and high are $79.50 and $126.79, respectively.
