Jim Cramer picks Disney as his top big media stock

CNBC’s Jim Cramer on Friday ranked major media stocks, choosing Walt Disney as the best of the group.

“After earnings season, it’s worth re-evaluating independent media outlets, because some of them are performing much better than expected,” Cramer said. He noted that investors were concerned about the sector due to concerns that a slowing economy would dampen advertising revenues, along with the general idea that there were many other sources of entertainment competing for consumers’ time.

1. Walt Disney: Disney “stole the show.”” This quarter reported better-than-expected earnings after years of struggle, Cramer said. The company was also able to raise its cost-cutting forecast by $2.2 billion. CEO Bob Iger has controlled Disney’s narrative, Cramer said, expressing confidence that this quarter represents a turning point. According to Kramer, Disney is likely to follow through on its cost-cutting promises, or at least “try.”
2. Fox: According to Kramer, Fox is not the best, but it is also far from the worst. He said the company’s quarter wasn’t bad, but it also didn’t do much to move the stock, which is still trading below where it was before the report. Although Fox’s streaming service, Tubi, has reported revenue growth, Cramer said it remains unpopular in the mainstream. But he noted that the company is set to make a “fortune” next year before the elections.
3. Warner Bros: Cramer called Warner Bros’ fourth quarter “clearly suboptimal,” even though it produced “Barbie,” the highest-grossing film of the year. Management said the company would not be able to repay its debts as previously planned if the advertising market remained weak. Warner Bros. exited the quarter with $43 billion in debt, and Cramer said the stock won’t do well if it doesn’t make progress on that front.
4. Paramount: Paramount has the worst balance sheet of the four companies, putting it at the bottom of the list, Cramer said. Although its streaming service made progress in terms of profitability, the company’s advertising revenue exceeded Wall Street expectations. For Cramer, Paramount needed lower interest rates and an improved advertising market.

Disclosure: Comcast has been excluded from the list to avoid conflicts of interest. Comcast owns NBCUniversal, the parent company of CNBC

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of The Walt Disney Company.