Analysts Have Made A Financial Statement On Warner Bros. Discovery, Inc.'s (NASDAQ:WBD) Yearly Report

There's been a notable change in appetite for Warner Bros. Discovery, Inc. (NASDAQ:WBD) shares in the week since its yearly report, with the stock down 12% to US$8.61. The statutory results were mixed overall, with revenues of US$41b in line with analyst forecasts, but losses of US$1.28 per share, some 8.8% larger than the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Warner Bros. Discovery

Taking into account the latest results, Warner Bros. Discovery's 22 analysts currently expect revenues in 2024 to be US$41.4b, approximately in line with the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.33 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$42.0b and earnings per share (EPS) of US$0.0037 in 2024. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

As a result, there was no major change to the consensus price target of US$15.13, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Warner Bros. Discovery, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$9.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Warner Bros. Discovery's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.08% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Warner Bros. Discovery.

The Bottom Line

The most important thing to take away is that the analysts are expecting Warner Bros. Discovery to become unprofitable next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$15.13, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Warner Bros. Discovery. Long-term earnings power is much more important than next year's profits. We have forecasts for Warner Bros. Discovery going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Warner Bros. Discovery's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.