Discovery (NASDAQ:DISCA) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a report released on Tuesday.
According to Zacks, “Shares of Discovery have underperformed its industry over in the past year. However, the completion of the Scripps buyout is positive for the company as its product portfolio has widened significantly. Also, this buyout will help Discovery strengthen its foothold internationally. Going ahead, the transaction is expected to be accretive to the combined entity’s adjusted earnings per share and free cash flow in the first year following closure. We are also encouraged by Discovery's joint venture with TEN for automotive media. In addition, growth in advertising and distribution revenues bode well for the company. However, loss of domestic subscribers remains a major concern. High costs and escalated debt levels represent further challenges.”
Other analysts have also issued reports about the stock. Barrington Research reaffirmed a “buy” rating and set a $30.00 price objective on shares of Discovery in a research note on Tuesday. Royal Bank of Canada upped their price objective on shares of Discovery to $29.00 and gave the company an “outperform” rating in a research note on Thursday, January 18th. ValuEngine lowered shares of Discovery from a “buy” rating to a “hold” rating in a research note on Friday, February 2nd. Macquarie raised shares of Discovery from a “neutral” rating to an “outperform” rating and set a $26.00 price objective for the company in a research note on Tuesday, January 2nd. Finally, Moffett Nathanson raised shares of Discovery from a “sell” rating to a “neutral” rating in a research note on Tuesday, February 20th. Two analysts have rated the stock with a sell rating, fourteen have given a hold rating and seven have issued a buy rating to the company. The stock has a consensus rating of “Hold” and a consensus target price of $25.05.
Discovery (NASDAQ:DISCA) last issued its quarterly earnings results on Tuesday, February 27th. The company reported $0.47 earnings per share for the quarter, beating the Zacks’ consensus estimate of $0.39 by $0.08. Discovery had a negative net margin of 4.90% and a positive return on equity of 21.68%. The company had revenue of $1.86 billion during the quarter, compared to the consensus estimate of $1.78 billion. During the same period in the prior year, the company earned $0.56 EPS. Discovery’s revenue was up 11.5% on a year-over-year basis. research analysts predict that Discovery will post 2.81 earnings per share for the current year.
In related news, insider David Leavy sold 20,673 shares of the stock in a transaction that occurred on Thursday, March 1st. The stock was sold at an average price of $23.41, for a total value of $483,954.93. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, insider Adria Alpert-Romm sold 16,238 shares of the stock in a transaction that occurred on Friday, March 16th. The stock was sold at an average price of $22.61, for a total value of $367,141.18. Following the completion of the transaction, the insider now owns 33,463 shares in the company, valued at approximately $756,598.43. The disclosure for this sale can be found here. Insiders sold a total of 39,482 shares of company stock worth $913,006 in the last quarter. 6.73% of the stock is owned by corporate insiders.
Large investors have recently added to or reduced their stakes in the stock. Icon Wealth Partners LLC bought a new stake in Discovery during the fourth quarter worth approximately $106,000. Delpha Capital Management LLC bought a new stake in Discovery during the fourth quarter worth approximately $149,000. Meag Munich Ergo Kapitalanlagegesellschaft MBH bought a new stake in Discovery during the fourth quarter worth approximately $167,000. Laurel Wealth Advisors Inc. bought a new stake in Discovery during the fourth quarter worth approximately $234,000. Finally, Chicago Equity Partners LLC bought a new stake in Discovery during the fourth quarter worth approximately $259,000. Hedge funds and other institutional investors own 48.85% of the company’s stock.
Discovery Company Profile
Discovery Communications, Inc operates as a media company worldwide. The company operates through U.S. Networks, International Networks, and Education and Other segments. It owns and operates various television networks under the Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Velocity, Discovery Family Channel, Destination America, American Heroes Channel, Discovery Life, The Oprah Winfrey Network, Eurosport, Discovery Kids, DMAX, and Discovery Home & Health brands, as well as other regional television networks.
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