CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We got this wrong as the transformation of WBD is likely to take longer with progress more visible later this year and into 2025. We are lowering our target by $3 to $11 using a forward TEV/EBITDA of 6.4x, below the direct peer average. We reduce our 2024 LPS estimate to -$0.50 from EPS of $0.10 and start 2025’s EPS at $0.15, forecasting total revenue of $41.6B in 2024 and $42.5B in 2025 compared to $41.2B in 2023. WBD posted a Q4 2023 LPS of -$0.16 and total revenue of $10.3B, both missing consensus estimates. Our EBITDA estimate is $10.5B in 2024 and $10.8B in 2025. Direct to consumer (DTC) reported -$55M adj. EBITDA and +3% revenue growth with 51% higher advertising. DTC net adds were up 800K subscribers with a light content slate from the labor strikes. ARPU increased 7% to $7.94. Weak advertising revenue (-14% Y/Y) in the Network unit led to -9% revenue Y/Y and -4% adj. EBITDA comps. We see weak advertising spend for Q1 2024. Studios realized disappointing -17% Y/Y revenue and -29% EBITDA in Q4 2023.