After a record-setting 2017, the Dow Jones Industrial Average has continued to gain ground in the new year, surging past the milestone level of 25,000 today for the first time on lighter-than-average volume.
The Dow 30 gained 141 points to reach 25,064 by midday, with a positive jobs report fueling strong gains in the opening minutes of trading.
Last year was the first ever that the Dow recorded increases in each of the 12 months around the calendar. Media stocks have not fully participated in the rally, however. Declining shares have outweighed gainers today, but those in positive territory include Sony, Comcast and AT&T. AMong the losers are Discovery, CBS, Lionsgate and Sinclair Broadcast Group. Roku, a darling of investors since going public in September, has shed 7% of its value today.
The 2018 outlook for media stocks from Wall Street analysts has been a mixed bag. Macquarie’s Tim Nollen this week downgraded Viacom, CBS and AMC Networks and reaffirmed neutral ratings on several others. In a report, he cited structural risks for traditional media companies, especially in the TV business. Viewer resistance to advertising, uncertainties in the M&A climate and risks of gated internet plans made possible by the repeal of net neutrality rules — all of it adds up to stagnation in Nollen’s view.
Wells Fargo’s Marci Ryvicker is much more bullish. She upgraded the media sector to “overweight” from “market weight.” She singled out 21st Century Fox, projecting 20% upside potential in the stock given the pending acquisition of many of its assets by Disney, and also saluted Comcast for its tax advantages and track record of innovation.