Headquartered in New York, Warner Bros. Discovery, Inc. (WBD) is a major player in entertainment and media with a market cap of $19.1 billion. The company specializes in producing, distributing, and streaming diverse content, including movies, television shows, and documentaries, spanning genres from drama and comedy to news and sports.
WBD has considerably underperformed the broader market over the last year. The stock has declined 17.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.9%. In 2024, the stock is down 28.6%, compared to SPX's 19.6% gains on a YTD basis.
Zooming in further, WBD also underperformed the Invesco Dynamic Leisure and Entertainment ETF (PEJ). The exchange-traded fund has gained 38.6% over the past 52 weeks.
Warner Bros. Discovery's shares have dropped 27.6% year-to-date, underperforming sector and industry peers, as the company faces declining ad sales and distribution revenues amid challenges in U.S. linear advertising and market uncertainties.
Plus, on Aug. 7, Warner Bros. Discovery reported its Q2 earnings, missing Wall Street estimates for both top and bottom lines. The stock plummeted 9% after the company reported its earnings.
For the current fiscal year, ending in December, analysts anticipate WBD’s loss per share to widen 251.6% year over year to $4.50 on a diluted basis. The company's earnings surprise history is disappointing. It missed the consensus estimate in all four quarters.
Among the 26 analysts covering WBD stock, the consensus rating is a “Moderate Buy.” That’s based on 10 "Strong Buy" ratings, one "Moderate Buy," 13 "Holds," and two "Strong Sells."
This configuration has been almost consistent over the past month.
On Oct. 2, Goldman Sachs Group (GS) analyst Mike Ng maintained a ‘Hold’ rating on Warner Bros. Discovery, with a price target of $8.50, which indicates a 4.6% upside from the current levels.
The mean price target of $10.06 represents a 23.7% premium to WBD’s current price levels. The Street-high price target of $18 suggests an upside potential of 121.4%.
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On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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