Warner Bros. Discovery Earnings: Mostly Awful Results, but Signs of Progress and Cause for Optimism

Warner Bros. Discovery once again shared disappointing quarterly results, with very light revenue and profits. But not only do we think the stock is pricing in an overly dire outcome, we think the poor first-quarter headline results obscure several areas of progress as the business evolves toward streaming. We expect significant improvement over the next several quarters, though the fate of Warner's expiring NBA rights is a wild card. We are maintaining our outlook and $20 fair value estimate.