WBD - Warner Bros. Discovery Inc. Is a Trending Stock: Facts to Know Before Betting on It | Benzinga
Warner Bros. Discovery (NASDAQ: WBD) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this operator of cable TV channels such as TLC and Animal Planet have returned -3% over the past month versus the Zacks S&P 500 composite's -3% change. The Zacks Broadcast Radio and Television industry, to which Warner Bros. Discovery belongs, has lost 9.3% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation ...