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Despite the challenges of the COVID-19 global pandemic, we were still able to achieve a strong start to the year "
More About Discovery Inc
P&G serves consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands, including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®, Vicks®, and Whisper®. The P&G community includes operations in approximately 70 countries worldwide
Overview of Discovery (DISCA) 3rd quarter 2020 earnings report
Third-Quarter 2020 Financial Highlights
- Total revenues of $2,561 million decreased 4% compared to the prior year quarter, or decreased 5% ex-FX.(1)
- U.S. distribution revenues increased 2% and advertising revenues decreased 8%; and
- International distribution revenues decreased 4% and advertising revenues decreased 9%, both ex-FX.
- Net income available to Discovery, Inc. was $300 million and EPS was $0.44 per diluted share.
- Adjusted EPS(2) was $0.81 per diluted share.
- Total Adjusted OIBDA(3) decreased 15% to $954 million, or decreased 14% ex-FX.
- Cash provided by operating activities was $860 million and Free Cash Flow(4) was $787 million.
- Repurchased 11.2 million Series C common shares for $228 million at an average price of $20.37 per share.
Discovery's management on their 3rd quarter 2020 earnings
Silver Spring, MD – November 5, 2020: Discovery, Inc. (“Discovery” or the “Company”) (NASDAQ: DISCA, DISCB, DISCK) today reported financial results for the quarter ended September 30, 2020.
David Zaslav, President and Chief Executive Officer of Discovery said, "Discovery delivered improving financial results in the third quarter, a testament to the powerful appeal of our content and brands, led in the U.S. by TLC, which beat top-rated sports and news networks in coveted Primetime demos, even in a record year for cable news. And as promised, our healthy liquidity position and another robust quarter of free cash flow generation allowed us to return $228 million to shareholders through share repurchases. In the midst of macroeconomic uncertainty with the ongoing COVID pandemic, as well as the continuing evolution of our industry, we remain focused on positioning Discovery for long-term growth and shareholder value creation through the execution of our strategic priorities, including our next generation initiatives."
David Zaslav, President and Chief Executive Officer of Discovery said, "Discovery delivered improving financial results in the third quarter, a testament to the powerful appeal of our content and brands, led in the U.S. by TLC, which beat top-rated sports and news networks in coveted Primetime demos, even in a record year for cable news. And as promised, our healthy liquidity position and another robust quarter of free cash flow generation allowed us to return $228 million to shareholders through share repurchases. In the midst of macroeconomic uncertainty with the ongoing COVID pandemic, as well as the continuing evolution of our industry, we remain focused on positioning Discovery for long-term growth and shareholder value creation through the execution of our strategic priorities, including our next generation initiatives."
Other Items
Share Buyback In February 2020, the Company's Board of Directors authorized common stock repurchases of up to $2 billion. During the three months ended September 30, 2020, the Company repurchased 11.2 million Series C common shares for $228 million at an average price of $20.37 per share, under its $2 billion repurchase authorization. There is $1.6 billion remaining under the authorization.
2020 Outlook
Discovery may provide forward-looking commentary in connection with this earnings announcement on its quarterly earnings conference call. Details on how to access the audio webcast are included below
Share Buyback In February 2020, the Company's Board of Directors authorized common stock repurchases of up to $2 billion. During the three months ended September 30, 2020, the Company repurchased 11.2 million Series C common shares for $228 million at an average price of $20.37 per share, under its $2 billion repurchase authorization. There is $1.6 billion remaining under the authorization.
2020 Outlook
Discovery may provide forward-looking commentary in connection with this earnings announcement on its quarterly earnings conference call. Details on how to access the audio webcast are included below
Discovery (DISCA) stock price history over the last 5 years
The image below shows the stock price history of Discovery Inc (DISCA) over the last 5 years. And its not been a good time for Discovery stockholders. 5 years ago the stock was trading at around $30 a stock and its currently trading at $20.93. That's a loss of -31% suffered by Discovery stockholders over the last 5 years.
Latest stock valuation of Discovery (DISCA)
So based on Discovery Inc’s latest earnings report what do we value Discovery stock at? Based on their earnings reported our valuation model provides a target price (full value price) for Discovery Corporation at $31 per stock
We therefore believe that the stock of Discovery Inc stock is undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $31. A good entry price into Discovery Corporation would therefore be at $27.90 or below.
We expect the stock of Discovery Corporation to kick up from current levels to levels closer to our target price in coming weeks and months as we do believe the group's stock is undervalued.
Since the stock of Discovery Inc is trading at well below our suggested entry point we rate the stock of Discovery Inc as a buy
We therefore believe that the stock of Discovery Inc stock is undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $31. A good entry price into Discovery Corporation would therefore be at $27.90 or below.
We expect the stock of Discovery Corporation to kick up from current levels to levels closer to our target price in coming weeks and months as we do believe the group's stock is undervalued.
Since the stock of Discovery Inc is trading at well below our suggested entry point we rate the stock of Discovery Inc as a buy
Next earnings release of Discovery Inc
It is expected that Discovery will release their 4th quarter 2020 earnings report in early February 2021
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