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World Cup Mania is here: 2 stocks ready to win

The World Cup – the biggest global sporting event – started on Sunday in Qatar. Despite the tournament’s controversial location, the football (or football as it’s known to the rest of the world) extravaganza is expected to attract an audience of billions who will tune in to watch icons such as Lionel Messi, Christiano Ronaldo and Kylian Mbappe attempt to win the Jules Get your hands on the Rimet Trophy and make history with their names and those of their countries.

Just for context, at the last World Cup in 2018, over 3.6 billion viewers watched games, with the loop drawing reaching 1.12 billion viewers — more than five times the viewership for Super Bowl 2022.

Such a global event inevitably has commercial implications and could be beneficial for certain categories. Which ones exactly? Streaming platforms, online betting, soccer video games, digital advertising and sporting goods/apparel are all segments that could benefit.

With that in mind, we dug into the TipRanks database and singled out two names that could get a boost from this global celebration of sports. Let’s get started.

Electronic Arts (EA)

Trying to emulate the skills of global sports gods is a favorite pastime for gamers, and the first stock we’ll look at is an expert on such thrills. Electronic Arts is one of the video game titans and a pioneer in home computer gaming.

Regarding the World Cup, EA Sports titles include FIFA football game alongside titles like NBA Live, Madden NFL and NHL. However, the portfolio goes beyond pure sports titles and includes some of the most well-known gaming brands such as Apex Legends, Battlefield, Need for Speed ​​​​and Plants vs. Zombies, among others.

After benefiting immensely from the work-from-home trend during the pandemic, the reopening and then economic downturn have been headwinds for the gaming industry as sales have cooled in 2022.

As such, EA’s latest earnings report for the second fiscal quarter (September quarter) was a mixed bag. Net bookings fell 5.4% year over year to $1.75 billion, missing Street’s guidance by $30 million, while the company also lowered its guidance for fiscal 2023 net bookings of 7.90 down $8.1 billion to $7.65 billion, down $7.85 billion. The Street forecast was $7.97 billion.

On balance, however, the company beat expectations with earnings per share of $1.07, ahead of the consensus estimate of $1.00. Additionally, the company raised its guidance for full-year 2023 EPS to approximately $3.11-$3.34 from the previous guidance of $2.79-$2.87.

Wedbush analyst Michael Pachter points to the strong performance of the game in the current quarter, which will benefit most from the World Cup.

“FIFA has had a record start so far this quarter, and the company announced several initiatives to drive Ultimate Team’s engagement throughout the remainder of the quarter,” said the analyst. “We’re confident in EA’s ability to grow the franchise in a World Cup year, and especially confident in its ability to grow in this quarter, which in itself is historically strong… We continue to believe the video game industry is undervalued, which is growing in the historically traded at a significant premium to the market multiple.”

To that end, Pachter rates EA stock as Outperform (i.e., Buy) while its $164 price target leaves room for 12-month gains of 25%. (To see Pachter’s track record, click here)

Looking at the consensus breakdown, based on 9 buy ratings vs. 4 holds, EA receives a Moderate Buy consensus rating. (See EA Stock Prediction on TipRanks)

fuboTV (FUBO)

Now let’s look at a stock that will benefit from the World Cup in a different way. FuboTV is a streaming platform mainly focused on sports.

In fact, the streaming service focused solely on soccer when it launched in 2015, but transitioned to an all-sports service in 2017 and later, by targeting the cable-cutting trend, morphed into a multi-channel virtual video programming distributor (vMVPD). Model that also offers non-sports programs. However, sport remains the main focus and depending on the region (the service is available in the US, Canada and Spain) subscribers can watch matches from the EPL, NBA, MLB, NFL, NHL, MLS, CPL as well as international football.

Those subscribers have grown each quarter, as they did in the third quarter. North American subscribers grew 31% year over year to a record 1,231,000, while international subscribers reached 358,000. All of this helped the company generate $225 million in revenue, which is higher than the $213 million expected on Wall Street.

Aside from continued growth, the problem for FUBO has been profitability — or lack thereof — a situation the company hopes to rectify by 2025. While the ongoing losses, along with other issues such as increased competition and the impact of inflation, worries Wedbush, analyst Michael Pachter believes the fact that FUBO boosted its revenue and subscriber outlook upon the release of its third-quarter metrics , an indication of how the company can advance because of the games.

“We believe that management’s confidence in the fourth quarter is due in part to increased political advertising as well as expected subscriber growth driven by the upcoming World Cup, which fuboTV will broadcast exclusively in 4K,” stated Tenant. “Given the upside and downside risk, we believe the current share price offers a compelling entry point.”

To that end, Pachter has a Outperform (ie, Buy) rating on FUBO stock, supported by a $5 price target. There’s plenty of upside potential – 80% to be precise – should the target be met in the next 12 months.

Overall, the stock claims a Moderate Buy consensus view with 3 buy and hold ratings each. (See FUBO Stock Prediction on TipRanks)

For great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important that you do your own analysis before making any investment.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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