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Warner Bros. Discovery (WBD) Stock Falls Amid Market Uptick: What Investors Need to Know

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In the latest trading session, Warner Bros. Discovery (WBD - Free Report) closed at $18.86, marking a -3.33% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.26%. Elsewhere, the Dow saw an upswing of 0.15%, while the tech-heavy Nasdaq appreciated by 0.48%.

Coming into today, shares of the operator of cable TV channels such as TLC and Animal Planet had gained 67.61% in the past month. In that same time, the Consumer Discretionary sector lost 0.21%, while the S&P 500 gained 2.87%.

The upcoming earnings release of Warner Bros. Discovery will be of great interest to investors. It is anticipated that the company will report an EPS of -$0.08, marking a 260% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $9.13 billion, down 5.17% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $0.34 per share and a revenue of $37.52 billion, demonstrating changes of +107.36% and -4.58%, respectively, from the preceding year.

Any recent changes to analyst estimates for Warner Bros. Discovery should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 2.17% increase. Warner Bros. Discovery is currently a Zacks Rank #3 (Hold).

In terms of valuation, Warner Bros. Discovery is presently being traded at a Forward P/E ratio of 58. For comparison, its industry has an average Forward P/E of 29.62, which means Warner Bros. Discovery is trading at a premium to the group.

Also, we should mention that WBD has a PEG ratio of 2.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 2.01 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 183, this industry ranks in the bottom 26% of all industries, numbering over 250.

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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