4 Entertainment Stocks to Avoid Due to the Delta Variant By StockNews

© Reuters. 4 Entertainment Stocks to Avoid Due to the Delta Variant

With the Delta variant of COVID-19 spreading rapidly, entertainment companies are expected to be impacted in a manner similar to last year with the original onset of the global public health crisis. Thus, we think entertainment stocks Live Nation (LYV), AMC Entertainment (NYSE:), Madison Square Garden Sports (MSGS), and Six Flags (NYSE:) are best avoided for now. Let’s discuss.The COVID-19 pandemic adversely affected entertainment companies last year, particularly movie theaters, production studios, and live entertainment organizations. entertainment houses remained closed for several months due to social distancing mandates and other restrictions. Consequently, global theatrical revenue declined 71.6% year-over-year to $12 billion in 2020. Also, theatrical entertainment accounted for only 15% of the total global entertainment revenue, compared to 43% in 2019.

While the industry has attracted record foot traffic over the past few months, the resurgence of COVID-19 cases is threatening the progress the industry has made this year. Entertainment companies are concerned about a decline in foot traffic in the coming months. The pandemic has also accelerated the shift toward digital entertainment, which is expected to affect the demand for in-person entertainment companies for an extended period.

Thus, we think it is better for now to avoid the stocks of Live Nation Entertainment, Inc. (NYSE:), AMC Entertainment Holdings, Inc. (AMC), Madison Square Garden Sports Corp. (MSGS), and Six Flags Entertainment Corporation (SIX).

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