There is no way Warner Bros. Discovery Inc. (WBD) can keep these numbers up

Warner Bros. Discovery Inc. (NASDAQ: WBD) stock fell -0.96% on Tuesday to $13.38 against a previous-day closing price of $13.51. With 11.39 million shares changed hands, the volume of the stock remained lighter than its average volume of 29.28 million shares. During the session, the Entertainment company that operates in wider Communication Services sector, reached to the highest price of $13.60 whereas the lowest price it dropped to was $13.24. The 52-week range on WBD shows that it touched its highest point at $31.12 and its lowest point at $8.82 during that stretch. It currently has a 1-year price target of $19.98. Beta for the stock currently stands at 1.39.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of WBD was up-trending over the past week, with a rise of 1.13%, but this was up by 48.01% over a month. Three-month performance dropped to -0.82% while six-month performance fell -8.73%. The stock lost -48.91% in the past year, while it has gained 41.14% so far this year. A look at the trailing 12-month EPS for WBD yields -1.68 with Next year EPS estimates of -0.06. For the next quarter, that number is -0.17. This implies an EPS growth rate of -15.20% for this year and 95.90% for next year. EPS is expected to grow by 7.40% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 3.50%.

Float and Shares Shorts:

At present, 2.43 billion WBD shares are outstanding with a float of 2.19 billion shares on hand for trading. On Oct 13, 2022, short shares totaled 82.56 million, which was 3.40% higher than short shares on Sep 14, 2022. In addition to Mr. David M. Zaslav as the firm’s Pres, CEO & Director, Dr. Gunnar Wiedenfels serves as its Sr. EVP & CFO.

Institutional Ownership:

Through their ownership of 54.48% of WBD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.08% of WBD, in contrast to 30.29% held by mutual funds. Shares owned by individuals account for 26.35%. As the largest shareholder in WBD with 6.87% of the stake, The Vanguard Group, Inc. holds 166,929,734 shares worth 166,929,734. A second-largest stockholder of WBD, BlackRock Fund Advisors, holds 114,167,301 shares, controlling over 4.70% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in WBD, holding 105,496,657 shares or 4.34% stake. With a 2.74% stake in WBD, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 66,500,210 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.10% of WBD stock, is the second-largest Mutual Fund holder. It holds 51,081,268 shares valued at 484.25 million. Invesco QQQ Trust holds 1.33% of the stake in WBD, owning 32,323,978 shares worth 306.43 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for WBD since 28 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 12 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With WBD analysts setting a high price target of $36.00 and a low target of $8.00, the average target price over the next 12 months is $20.13. Based on these targets, WBD could surge 169.06% to reach the target high and fall by -40.21% to reach the target low. Reaching the average price target will result in a growth of 50.45% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. WBD will report FY 2022 earnings on 02/22/2024. Analysts have provided yearly estimates in a range of -$0.70 being high and -$3.46 being low. For WBD, this leads to a yearly average estimate of -$2.00. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Warner Bros. Discovery Inc. surprised analysts by -$0.50 when it reported -$0.76 EPS against a consensus estimate of -$0.26. The surprise factor in the prior quarter was -$1.58. Based on analyst estimates, the high estimate for the next quarter is $0.05 and the low estimate is -$0.61. The average estimate for the next quarter is thus -$0.29.

Summary of Insider Activity:

Insiders traded WBD stock several times over the past three months with 0 Buys and 3 Sells. In these transactions, 0 shares were bought while 95,835 shares were sold. The number of buy transactions has increased to 72 while that of sell transactions has risen to 56 over the past year. The total number of shares bought during that period was 226,315,827 while 191,893,454 shares were sold.

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