Warner Bros. Discovery Anticipates Losses Ahead of Q1 Earnings

New York-based Warner Bros. Discovery, Inc. (WBD) is a global media and entertainment powerhouse. With a market capitalization of $19.8 billion, it features a comprehensive portfolio of content, brands, and franchises across television, film, streaming, and gaming. The company plans to announce its fiscal first-quarter earnings for 2025 before the market opens on Thursday, May 8.

Analysts Predict Significant Losses

In anticipation of the earnings announcement, analysts forecast a loss of $0.14 per share on a diluted basis. This marks a significant improvement from a loss of $0.40 per share during the same quarter last year. WBD has recently struggled, missing analysts’ consensus estimates in three of the last four quarters while only beating forecasts once.

Annual Predictions and EPS Trends

For the entire fiscal year, analysts expect WBD to report a loss of $0.13 per share, reflecting a 97.2% improvement from a loss of $4.62 in fiscal 2024. Looking forward, its earnings per share (EPS) is projected to rise by 192.3% year-over-year to $0.12 in fiscal 2026.

Performance Compared to Market Benchmarks

Over the past 52 weeks, WBD has struggled, registering just a 3.6% increase in share value compared to the S&P 500’s gains of 9.4%. The company also lagged behind the Communication Services Select Sector SPDR ETF’s 21% rise in the same timeframe.

Competitive Landscape and Challenges

WBD faces significant competition from established players like Netflix, Inc. (NFLX) and The Walt Disney Company (DIS), partly due to its smaller subscriber base. Ongoing struggles in the cable TV sector could impede overall performance. Moreover, aggressive plans for international expansion and digital content generation may result in rising costs, which could impact profitability. The intense competition in the streaming market adds further challenges to subscriber growth targets, while a reliance on cost control may restrict investments in content creation that help maintain subscriber retention.

After announcing its Q4 results on February 27, WBD shares rose more than 4%. However, the company reported a loss of $0.20 per share, which fell short of Wall Street’s EPS expectations of $0.04. Revenue also missed forecasts, clocking in at $10 billion against an expected $10.4 billion.

Analysts’ Ratings and Price Targets

Although analysts show a reasonably bullish outlook on WBD stock, assigning it a “Moderate Buy” rating overall, the opinions vary. Out of 25 analysts, 11 recommend a “Strong Buy,” one suggests a “Moderate Buy,” while 13 opt for a “Hold.” The average analyst price target stands at $12.24, indicating a potential upside of 42.5% from current levels.

On the date of publication, Neha Panjwani did not hold (either directly or indirectly) any positions in the securities mentioned in this article. All information herein is for informational purposes only. For more details, please view the Barchart Disclosure Policy here.

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