Yahoo Finance Warner Bros. Discovery, Inc. (NASDAQ:WBD) Just Released Its First-Quarter Earnings: Here's What Analysts Think
Warner Bros. Discovery, Inc. (NASDAQ:WBD) just released its latest first-quarter report and things are not looking great. Revenues missed expectations somewhat, coming in at US$10.0b, but statutory earnings fell catastrophically short, with a loss of US$0.40 some 89% larger than what the analysts had predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Warner Bros. Discovery
Taking into account the latest results, Warner Bros. Discovery's 23 analysts currently expect revenues in 2024 to be US$41.1b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 37% to US$0.78. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$41.6b and losses of US$0.32 per share in 2024. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
As a result, there was no major change to the consensus price target of US$12.85, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Warner Bros. Discovery, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$7.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Warner Bros. Discovery's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 36% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Warner Bros. Discovery is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Warner Bros. Discovery going out to 2026, and you can see them free on our platform here..
You can also see whether Warner Bros. Discovery is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
