AT&T, Disney, Apple and Discovery See Big Stock Gains in 2019

Cynthia Littleton

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Disney had a banner year on Wall Street. So did Apple, Facebook, AT&T and Discovery amid another year of dramatic marketplace shifts for traditional media and digital giants.

Disney’s strategic decisions moved markets and dominated the discussion about the fate of traditional media throughout the year. After finishing out 2018 with the stock essentially flat year-over-year, Disney shares wrapped the year on Tuesday at $144.63, marking a 31.9% gain for the year. (See chart below)

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The big accelerator for Disney was its April 11 investor presentation outlining its plans for the Disney Plus streaming service. The stock shot up nearly 12% on the following day, and has been buoyant ever since. The Nov. 12 launch of Disney Plus gave the stock a 7% one-day bounce. Thank you, Baby Yoda.

“Disney Plus has also gotten off to a great start with the success of ‘The Mandalorian,’ which has helped the service further break through,” veteran media analyst Michael Nathanson wrote earlier this month. “Indeed, what Disney plus got with ‘The Mandalorian’ was what Netflix had with ‘House of Cards’ – a tentpole series to generate buzz and excitement in the new service.”

Disney’s largest traditional rivals — Comcast and AT&T — also had a better reception from Wall Street than in 2018.

The ranks of media giants shrank by two august ticker symbols this year as Disney absorbed 21st Century Fox in March. Viacom and CBS Corp. again joined forces into the newly minted ViacomCBS.

Shares of Viacom and CBS fell sharply in the weeks after the long-expected stock-swap agreement was formally announced on Aug. 13. The stock has been inching up over the past month following the closing of the transaction on Dec. 4. In 2018, both companies saw shares drop by double digits.

Discovery Inc. had a bumpy year as the company rode the swings of investor sentiment on the fate of traditional linear cable television companies. But shares have been on the upswing since early November when Discovery reported earnings that showed gains in domestic advertising and other signs of renewed momentum. The company’s increased activity in streaming and direct-to-consumer offerings on the international front is seen as a harbinger of things to come at home. Last year Discovery ended the year with a 10% gain.

Comcast shares finished out 2019 in a better place than it started, logging a 32% gain over the year. This year’s performance compares to a 14% slide in 2018 amid the company’s bidding battle with Disney over 21st Century Fox and Sky.

AT&T came out of the cellar this year after about two years of uncertainty around its Time Warner acquisition. The company’s execution of its debt-reduction strategy through asset sales has bolstered confidence that AT&T’s plan in working. The former Time Warner units faced a turbulent transition into AT&T ownership but the promised boost to AT&T earnings from Warner Bros. and HBO has materialized, cheering investors. A 37% improvement in 2019 is a welcome rebound from last year when the stock sank 27%.

AMC Networks had a tougher year as it grappled with the same issues as Discovery. The company of late has emphasized its efforts to expand with niche streaming services such as Acorn, Urban Movie Channel and SundanceNow. The company that is home to AMC, SundanceTV, BBC America, IFC and We TV ended 2018 with a 1% gain.

Lionsgate logged another dismal frame, dropping 33.8% on the heels of 2018’s 52% plunge. The company’s shares were rattled by weakness at the box office, questions about how it would bring scale to its Starz acquisition from 2016 and other concerns.

Among the FAANG digital upstarts, Netflix was up 21% for the year but the company had its bumpiest ride since it plunged into the original programming business in 2013.

The stock took significant hits in July and September amid concerns about slowing subscriber momentum and the ballooning programming obligations on Netflix’s balance sheet. But shares have been on the rise since around the mid-November introduction of Disney Plus, the most formidable competition that Netflix has faced yet in the streaming arena. Last year Netflix led the FAANG companies with a 33% share price gain.

Apple defied gravity with an 86.2% gain despite getting 2019 off to a rocky start in January when it had to warn investors of an earnings revision due to slowing global iPhone sales. That forecast came to fruition in the second quarter revenue numbers reported in July. Apple also was part of the “streaming wars” with its momentous move into the production and distribution of original content with the Nov. 1 launch of Apple TV Plus.

Investors must have taken Tim Cook at his word — “We manage Apple for the long term,” he stated after the revenue miss — because shares have moved steadily upward since August. That performance compares to an 8% decline in 2018.

Amazon had a solid if unspectacular showing, climbing 17.3% compared to last year’s 26% hike.

Facebook has been in the headlines nonstop with questions about its potentially corrosive effect on discourse, politics, and, of course, privacy. Last year that translated to a 25% slide in its share price. But the stock took a big jump at the end of January and climbed further in the second half of the year to finish out with a 56.6% gain.

Google had some tumult at the top this year as company co-founder Larry Page stepped down as CEO of parent company Alphabet while co-founder Sergey Brin is exiting as Alphabet president. The company’s stranglehold on the digital advertising market is drawing increasing scrutiny from regulators and lawmakers at home and abroad.

But for now, investors aren’t spooked. After hitting a small valley in June, Alphabet shares traded above the $1100 mark for the rest of the year. The company that went public in 2004 finished the year up 29%, compared to a 1% decline last year.

TRADITIONAL MEDIA
(ranked by share price % gain/loss in 2019)

AT&T
Closing price Jan. 2: $29.54
Closing price Dec. 31: $39.08
% gain/loss: +37%
52-week range: $28.30-$39.70

DISCOVERY
Closing price Jan. 2: $25.83
Closing price Dec. 31: $32.74
% gain/loss: +32.3%
52-week range: $24.11-$33.66

COMCAST
Closing price Jan. 2: $34.37
Closing price Dec. 31: $44.97
% gain/loss: +32%
52-week range: $33.42-$47.27

DISNEY
Closing price Jan. 2: $108.97
Closing price Dec. 31: $144.63
% gain/loss: +31.9%
52-week range: $105.94-$153.41

VIACOMCBS
Closing price Jan. 2: $45.66
Closing price Dec. 31: $41.97
% gain/loss: -4%
52-week range: $35.02-$53.71

AMC NETWORKS
Closing price Jan. 2: $56.64
Closing price Dec. 31: $39.50
% gain/loss: -28%
52-week range:$35.60-$68.42

LIONSGATE
Closing price Jan. 2: $16.62
Closing price Dec. 31: $10.66
% gain/loss: -33.8%
52-week range: $7.65-$19

FAANGs
(ranked by share price % gain/loss in 2019)

APPLE
Closing price Jan. 2: $157.92
Closing price Dec. 31: $293.65
% gain/loss: +86.2%
52-week range: $142-$293.97

FACEBOOK
Closing price Jan. 2: $135.68
Closing price Dec. 31: $205.25
% gain/loss: +56.6%
52-week range: $128.56-$208.93

GOOGLE
Closing price Jan. 2: $1,045.85
Closing price Dec. 31: $1337.02
% gain/loss: +29%
52-week range: $1,014.07-$1,365

NETFLIX
Closing price Jan. 2: $267.66
Closing price Dec. 31: $323.57
% gain/loss: +21%
52-week range: $252.28-$385.99

AMAZON
Closing price Jan. 2: $1539.13
Closing price Dec. 31: $1,847.84
% gain/loss: +17.3%
52-week range: $1,460.93-$2,035.80

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