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Discovery, Inc.

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Shares of Discovery have underperformed its industry over in the past year. However, the completion of the Scripps buyout is positive for the company as its product portfolio has widened significantly. Also, this buyout will help Discovery strengthen its foothold internationally.  Going ahead, the transaction is expected to be accretive to the combined entity’s adjusted earnings per share and free cash flow in the first year following closure. We are also encouraged by Discovery's joint venture with TEN for automotive media. In addition, growth in advertising and distribution revenues bode well for the company.  However, loss of domestic subscribers remains a major concern. High costs and escalated debt levels represent further challenges.


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