Warner Bros. Discovery, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

There's been a notable change in appetite for Warner Bros. Discovery, Inc. (NASDAQ:WBD) shares in the week since its quarterly report, with the stock down 12% to US$18.15. Revenues were US$3.2b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.69, an impressive 303% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Warner Bros. Discovery

After the latest results, the eleven analysts covering Warner Bros. Discovery are now predicting revenues of US$48.9b in 2022. If met, this would reflect a major 290% improvement in sales compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.96 per share in 2022. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$42.2b and losses of US$1.10 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Despite these upgrades,the analysts have not made any major changes to their price target of US$37.13, implying that their latest estimates don't have a long term impact on what they think the stock is worth. 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. Currently, the most bullish analyst values Warner Bros. Discovery at US$52.00 per share, while the most bearish prices it at US$18.00. 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 clear from the latest estimates that Warner Bros. Discovery's rate of growth is expected to accelerate meaningfully, with the forecast 5x annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Warner Bros. Discovery to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Warner Bros. Discovery analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Warner Bros. Discovery you should be aware of, and 2 of them are significant.

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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.