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Warner Bros. Discovery (WBD) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Warner Bros. Discovery (WBD - Free Report) closed at $14.91, marking a -0.6% move from the previous day. This change lagged the S&P 500's 0.25% gain on the day. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq gained 7.26%.

Prior to today's trading, shares of the operator of cable TV channels such as TLC and Animal Planet had gained 59.07% over the past month. This has outpaced the Consumer Discretionary sector's gain of 15.45% and the S&P 500's gain of 5.73% in that time.

Investors will be hoping for strength from Warner Bros. Discovery as it approaches its next earnings release. On that day, Warner Bros. Discovery is projected to report earnings of $0.08 per share, which would represent a year-over-year decline of 42.86%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.16 billion, up 250.29% from the year-ago period.

Any recent changes to analyst estimates for Warner Bros. Discovery should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.73% higher. Warner Bros. Discovery is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Warner Bros. Discovery has a Forward P/E ratio of 15.19 right now. Its industry sports an average Forward P/E of 16.59, so we one might conclude that Warner Bros. Discovery is trading at a discount comparatively.

We can also see that WBD currently has a PEG ratio of 1.5. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Broadcast Radio and Television was holding an average PEG ratio of 1.6 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 207, putting it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WBD in the coming trading sessions, be sure to utilize Zacks.com.


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