
Sometimes you need to separate your personal feelings from your thoughts about companies and their stocks.
People who loath Tesla Inc.
TSLA,
-0.58%
CEO Elon Musk — who famously made a bid on April 13 to buy Twitter Inc.
TWTR,
+3.05%
for $54.20 a share — have been having a ball posting nasty messages under #RIPTwitter.
But a review at the S&P 500
SPX,
-0.74%
communication services sector points to remarkable expectations for the company, even among analysts who don’t favor its stock.
Twitter’s shares closed at $48.93 on April 22 — 10% below Musk’s takeout offer price. That showed a lack of confidence that a deal might get done.
But weekend rumors changed the scene, with Twitter’s stock opening at $51.02, now only 6% below Musk’s takeout price.
Rapid growth for Twitter, even without Musk
As we wait for an announcement of any deal, we have screened the worst-performing sector in the S&P 500 this year: communication services. The sector was down 23% for 2022 through April 22, led by Netflix Inc.
NFLX,
-4.08%,
with a year-to-date decline of 64%. (Twitter was up 13% for 2022 through April 22.)
Great sales expectations
Here are all 23 stocks in the S&P 500 communication services sector, ranked by expected compound annual growth rates (CAGR) for sales over the next two calendar years among analysts polled by FactSet:
Company
Ticker
Two-year estimated sales CAGR
Estimated sales – 2022 ($mil)
Estimated sales – 2023 ($mil)
Estimated sales – 2024 ($mil)
Take-Two Interactive Software Inc.
28.6%
$3,975
$5,118
$6,571
Twitter Inc.
19.1%
$5,945
$7,222
$8,431
Match Group Inc.
16.8%
$3,519
$4,139
$4,798
Meta Platforms Inc. Class A
15.5%
$131,084
$152,913
$175,011
Alphabet Inc. Class A
15.2%
$302,631
$349,239
$401,542
Activision Blizzard Inc.
10.5%
$8,601
$10,071
$10,504
Netflix Inc.
9.8%
$32,512
$35,551
$39,202
Live Nation Entertainment Inc.
LYV
9.8%
$14,012
$15,619
$16,887
Walt Disney Co.
9.2%
$87,406
$96,433
$104,216
Electronic Arts Inc.
7.5%
$7,912
$8,480
$9,149
Interpublic Group of Cos. Inc.
5.8%
$9,499
$9,869
$10,631
Paramount Global Class B
5.3%
$30,588
$32,066
$33,918
Fox Corp. Class A
3.9%
$14,439
$14,886
$15,588
News Corp. Class A
3.9%
$10,340
$10,608
$11,153
Charter Communications Inc. Class A
3.8%
$54,170
$56,239
$58,354
Omnicom Group Inc
3.3%
$14,352
$14,826
$15,322
Warner Bros. Discovery Inc. Series A
3.0%
$12,611
$12,790
$13,375
T-Mobile US Inc.
2.9%
$80,971
$83,177
$85,749
Comcast Corp. Class A
2.9%
$122,556
$124,791
$129,765
Verizon Communications Inc.
2.0%
$136,935
$139,228
$142,373
DISH Network Corp. Class A
0.9%
$17,380
$17,450
$17,687
AT&T Inc.
-1.4%
$127,075
$121,924
$123,621
Lumen Technologies Inc.
-4.0%
$17,287
$15,735
$15,945
Source: FactSet
Click on the tickers for more about each company.
If you haven’t already done so, you should read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
The estimates are for calendar years, because not every company’s fiscal year matches the calendar.
Twitter ranks second on the list for expected sales growth through 2023, even though only 11% of analysts polled by FactSet rate the shares a “buy” or the equivalent.
Rapid earnings growth expected
Here’s a similar comparison, this time sorting the components of the S&P 500 communication services sector by expected earnings-per-share CAGR through 2024:
Company
Ticker
Two-year estimated EPS CAGR
Estimated EPS – 2022
Estimated EPS – 2023
Estimated EPS – 2024
Live Nation Entertainment Inc.
124.7%
$0.45
$1.49
$2.28
T-Mobile US Inc.
85.0%
$2.74
$6.12
$9.37
Take-Two Interactive Software Inc.
34.1%
$5.76
$7.79
$10.36
Twitter Inc.
31.7%
$0.85
$1.14
$1.48
Charter Communications Inc. Class A
25.4%
$30.55
$37.55
$48.02
Match Group Inc.
21.8%
$2.57
$3.22
$3.81
Walt Disney Co.
19.1%
$4.76
$5.91
$6.75
Warner Bros. Discovery Inc. Series A
18.9%
$2.23
$2.66
$3.15
News Corp. Class A
16.9%
$0.95
$1.07
$1.29
Alphabet Inc. Class A
16.6%
$116.48
$137.13
$158.49
Meta Platforms Inc. Class A
16.5%
$12.13
$14.35
$16.47
Netflix Inc.
15.9%
$10.93
$12.14
$14.68
Comcast Corp. Class A
14.4%
$3.54
$3.95
$4.64
Activision Blizzard Inc.
13.6%
$3.58
$4.35
$4.62
Electronic Arts Inc.
12.1%
$7.37
$8.20
$9.27
Interpublic Group of Cos. Inc.
7.6%
$2.67
$2.86
$3.10
Fox Corp. Class A
7.2%
$3.29
$3.51
$3.77
Omnicom Group Inc
6.7%
$6.72
$7.15
$7.65
Verizon Communications Inc.
3.7%
$5.41
$5.59
$5.82
AT&T Inc.
-0.7%
$2.53
$2.53
$2.49
Paramount Global Class B
-1.3%
$2.76
$2.32
$2.68
Lumen Technologies Inc.
-15.5%
$1.42
$1.05
$1.01
DISH Network Corp. Class A
-33.6%
$2.69
$1.69
$1.19
Source: FactSet
Twitter ranks fourth, with analysts expecting a two-year EPS CAGR of 31.7%. The top-ranked company, Live Nation Entertainment Inc.
LYV,
+0.55%,
is a pandemic recovery play as the concert business resumes.