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Warner Bros. Discovery (WBD) Dips More Than Broader Markets: What You Should Know

·3 min read

In the latest trading session, Warner Bros. Discovery (WBD) closed at $11.79, marking a -1.83% move from the previous day. This move lagged the S&P 500's daily loss of 1.72%. At the same time, the Dow lost 1.62%, and the tech-heavy Nasdaq gained 0.01%.

Heading into today, shares of the operator of cable TV channels such as TLC and Animal Planet had lost 11.43% over the past month, lagging the Consumer Discretionary sector's loss of 10.47% and the S&P 500's loss of 9.09% in that time.

Wall Street will be looking for positivity from Warner Bros. Discovery as it approaches its next earnings report date. The company is expected to report EPS of $0.04, down 90.48% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $10.86 billion, up 244.84% from the year-ago period.

WBD's full-year Zacks Consensus Estimates are calling for earnings of $1.27 per share and revenue of $35.19 billion. These results would represent year-over-year changes of -21.12% and +188.69%, respectively.

Investors should also note any recent changes to analyst estimates for Warner Bros. Discovery. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 12.43% lower within the past month. Warner Bros. Discovery is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Warner Bros. Discovery is holding a Forward P/E ratio of 9.49. This valuation marks a premium compared to its industry's average Forward P/E of 8.63.

We can also see that WBD currently has a PEG ratio of 1.17. 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 was holding an average PEG ratio of 0.93 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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