Warner Bros. Discovery Faces Financial Challenges Ahead of Q3 Earnings
Based in New York, Warner Bros. Discovery, Inc. (WBD) is a global leader in media and entertainment, delivering compelling content across television, film, and streaming platforms. With a market cap of $19.2 billion, WBD is renowned for its extensive portfolio that enhances storytelling, viewer engagement, and digital media innovation. The company is set to announce its fiscal Q3 earnings results after the market closes on Thursday, Nov. 7.
Analysts Anticipate a Narrowing Loss
Ahead of the event, analysts expect WBD to report a loss of $0.05 per share, representing a significant improvement compared to the loss of $0.17 per share in the same quarter last year. Notably, the company has consistently missed Wall Street’s earnings per share (EPS) estimates in all of its past four quarterly reports.
Future Projections Indicate Worsening Losses
For fiscal 2024, analysts are projecting a loss per share of $4.50, a sharp increase of 251.6% from the $1.28 loss per share in fiscal 2023.
Year-to-Date Performance Lags Behind Competitors
WBD stock has declined 31.3% year-to-date, underperforming the broader S&P 500 Index’s 23% gains, as well as the Communication Services Select Sector SPDR ETF Fund’s 25.6% gains during the same period.
Market Reactions to Recent Developments
On Sep. 12, the stock rose 10.4% following the announcement of a multi-year distribution partnership with Charter Communications. This agreement aims to integrate traditional linear video with direct-to-consumer (DTC) streaming services, potentially boosting value for customers.
However, shares dropped nearly 9% after the Q2 earnings announcement that revealed the company fell short of EPS and revenue forecasts due to declines in all business segments. This was further worsened by challenges in U.S. linear advertising and sports rights renewals.
Analyst Outlook Remains Cautiously Positive
Overall, the consensus opinion on WBD stock is cautiously optimistic, resulting in a “Moderate Buy” rating. Out of 26 analysts covering the stock, 10 recommend a “Strong Buy,” one suggests a “Moderate Buy,” 13 advise a “Hold,” and two recommend “Strong Sell.” This sentiment is slightly less bullish compared to three months ago when there were 12 “Strong Buy” ratings.
Potential Upside Seen in Future Price Targets
WBD’s average analyst price target stands at $10.06, indicating a potential upside of 28.6% from current levels.
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On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
