Valued at a market cap of $20.7 billion, Warner Bros. Discovery, Inc. (WBD) is a media and entertainment company that creates and distributes content and brands across television, film, and streaming. The New York-based company owns several well-known brands, including Discovery Channel, HBO Max, and Warner Bros. Pictures.
Companies valued at $10 billion or more are generally described as “large-cap” stocks, and Warner Bros. Discovery fits right into that category. The company’s differentiated and complete portfolio of content and brands across television, film, and streaming is available in more than 220 countries and territories and 50 languages.
Despite a 31.9% decline from its 52-week high of $12.70 reached in December last year, shares of this media company have gained 23.8% over the past three months, significantly surpassing the broader Nasdaq Composite’s ($NASX) 1.6% decline over the same time frame.
However, in the longer term, WBD stock is down nearly 24% on a YTD basis, lagging behind NASX’s 17.1% gains. Moreover, shares of WBD have declined 25.7% over the past 52 weeks, significantly underperforming NASX’s 28.2% returns over the same time frame.
WBD has been trading below its 200-day and 50-day moving averages since last year despite a few fluctuations.
Shares of Warner Bros. Discovery dropped nearly 9% after the company revealed a larger-than-expected Q2 loss of $4.07 per share on Aug. 7. Revenue of $9.7 billion also fell short of expectations, driven by declines across all business segments and challenges in U.S. linear advertising and sports rights renewals.
However, on Sep. 12, the stock jumped 10.4% after the announcement of the company’s multi-year distribution agreement with Charter Communications, which will integrate traditional linear video with direct-to-consumer (DTC) streaming services to add more value to customers.
WBD has outpaced its rival, Lions Gate Entertainment Corp.’s (LGF.A) 27.1% decline on a YTD basis but has lagged behind Lions Gate Entertainment’s 8.8% decline over the past 52 weeks.
Despite WBD’s underperformance over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 26 analysts covering the stock, and the mean price target of $10.02 suggests a premium of 19% to its current levels.
On the date of publication, Sohini Mondal 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.
