DIS - Warner Bros. Discovery: Debt Reductions Boost Future

2024-04-19 09:37:49 ET

Summary

• Following a 66% share price decline since the April 2022 creation of Warner Bros. Discovery, Inc., it is now trading near an all-time low.
• $12.4 billion, 22% of the debt, has been paid down, with $44.2 billion gross debt remaining.
• $10.2 billion in EBITDA in 2023.
• $6.2 billion free cash flow generated in 2023.

Investment Thesis

Warner Bros. Discovery, Inc. ( WBD ) was created by the 08 April 2022 merger of AT&T Inc.'s (T) WarnerMedia unit and Discovery, Inc.

WBD stock price has declined 66% since the merger, underperforming against larger category rivals, and is now trading near all-time lows.

Among the frequently cited negatives for WBD is the large debt load. Even after retiring $12.4 billion of debt since April 2022, WBD still had a gross debt of $44.2 billion at the end of 2023....

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