Warner Bros. Discovery (NASDAQ:WBD) dropped in pre-market trading after it reported disappointing Q4 results. The media and entertainment major posted revenues of $10.28 billion in Q4, a decline of 7% year-over-year when excluding currency rate fluctuations. This was below analysts’ estimates of $10.34 billion.
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The company’s losses narrowed to $0.16 per share in the fourth quarter compared to a loss of $0.86 per share in the same period last year. However, analysts were expecting WBD’s losses to narrow further to $0.10 per share.
WBD’s direct-to-consumer service was profitable in FY23, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $103 million. This was driven by higher growth in advertising revenues due to higher user engagement in its subscription streaming service, Max. The company reported 97.7 million direct-to-consumer subscribers, up by 2% year-over-year.
Moreover, WBD generated free cash flows of $6.2 billion in 2023, a jump of 86% year-over-year.
What Is the Forecast for WBD Stock?
Analysts remain cautiously optimistic about WBD stock with a Moderate Buy consensus rating based on five Buys and Holds each and one Sell. Over the past year, WBD stock has slid by more than 35%, and the average WBD price target of $13.94 implies an upside potential of 45.8% at current levels. It is important to note here that estimates will likely change following today’s earnings report.
