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Discovery Communications (DISCA) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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Discovery Communications (DISCA) closed the most recent trading day at $37.82, moving -1.46% from the previous trading session. This change lagged the S&P 500's 1.11% gain on the day.

Coming into today, shares of the operator of cable TV channels such as TLC and Animal Planet had lost 46.74% in the past month. In that same time, the Consumer Discretionary sector lost 7.07%, while the S&P 500 gained 4.72%.

DISCA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.64, down 26.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.77 billion, up 3.32% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.95 per share and revenue of $11.98 billion. These totals would mark changes of -7.81% and +12.27%, respectively, from last year.

Any recent changes to analyst estimates for DISCA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.4% higher within the past month. DISCA is currently a Zacks Rank #4 (Sell).

In terms of valuation, DISCA is currently trading at a Forward P/E ratio of 13.63. This represents a discount compared to its industry's average Forward P/E of 15.59.

Also, we should mention that DISCA has a PEG ratio of 1.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Broadcast Radio and Television industry currently had an average PEG ratio of 1.26 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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