New York-based Warner Bros. Discovery, Inc. (WBD) is a global media and entertainment company. Valued at a market cap of $25.1 billion, the company delivers a diverse portfolio of branded content across television, film, streaming, and gaming, engaging global audiences through iconic platforms such as Discovery Channel, Max, CNN, DC, HBO, TNT Sports, Cartoon Network and more. The leading cable TV channels operator is expected to announce its fiscal Q4 2024 before the market opens on Thursday, Feb. 27.
Ahead of the event, analysts expect WBD to report a profit of $0.11 per share, up 168.8% from a loss of $0.16 per share in the year-ago quarter. The company beat the consensus estimates in one of the last four quarters while missing on three other occasions. In Q3, WBD exceeded the consensus EPS estimate by 171.4%.
For the full year, analysts expect WBD to report a loss of $4.33, significantly down from $1.28 in fiscal 2023. However, its EPS is expected to grow 104.2% year-over-year to $0.18 in fiscal 2025.
WBD stock has underperformed both the S&P 500’s ($SPX) 25.3% gain and Communication Services Select Sector SPDR Fund’s (XLC) 31.8% return over the past 52 weeks, with shares down 1.5%.
WBD’s underperformance can be attributed to the evolving content consumption landscape, where the transition from cable to streaming platforms has led to higher content acquisition and production costs, along with a reduced advertising market for traditional networks.
However, despite reporting weaker-than-expected Q3 revenue of $9.6 billion, WBD shares closed up more than 11% on Nov. 7 as the company posted a profit of $0.05 per share, significantly beating the consensus expectation The Direct-to-Consumer segment posted 7.2 million sequential subscriber additions, reaching 110.5 million subscribers, well above the forecast while advertising revenues in this segment surged 51% year over year. Additionally, renewed optimism stemmed from the successful multi-year renewal of the Charter carriage partnership and robust viewership of the Olympics, which boosted confidence.
Analysts’ consensus opinion on WBD stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 25 analysts covering the stock, 11 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and 13 give a “Hold.” As of writing, WBD is trading below the average analyst price target of $12.24.
