WBD - Warner Bros. Discovery: Why I Disagree With The Crowd

2024-05-23 14:27:08 ET

Summary

• Warner Bros. Discovery, Inc. stock is currently trading at about $8 a share, compared to its IPO price of ~$24.
• Warner Bros. Discovery is one of the largest media companies, owning iconic brands and popular content.
• As such, many investors are probably attempting to do some bottom-fishing here.
• My goal is to caution against such attempts. The stock is actually expensively valued given the market's gloomy earnings outlook.
• And I see reasons for Warner Bros. Discovery's actual earnings to be even worse than market consensus.

WBD stock trades in the single-digits now

For readers new to the stock, Warner Bros. Discovery, Inc. ( WBD ) went public in April 2022. The company was formed as a merger between Discovery Inc. and AT&T's WarnerMedia as part of its assets spun off. The IPO was priced at $24.08 a share at that time. The stock price then suffered large corrections since the IPO. It lost more than 1/3 of its price in the past 12 months alone, as seen in the chart below. Currently, it trades at about $8 a share....

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