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Discovery Inc C DISCK

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1-Star Price

PREMIUM

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PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Strong Discovery Q2 Eclipsed by Weak Streaming Net Adds; Merger On Track To Be Approved

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Discovery posted a better-than-expected second quarter as revenue and adjusted EBITDA came in ahead of FactSet consensus projections. Despite the beat, shares traded off in the morning of Aug. 3 as investors appear to be focused on the streaming business. The firm ended the quarter with 17 million direct-to-consumer subscribers, up only two million from the first quarter. Given the launch of discovery+ in January, there does appear to be some slowdown in momentum. We are maintaining our narrow moat and $42 fair value estimate, which reflects the merger with WarnerMedia.

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Company Profile

Business Description

Discovery is the one of the largest global media providers with over 2 billion cumulative subscribers in over 220 countries. Its three traditional networks (Discovery, TLC, and Animal Planet) each reach over 84 million U.S. households and more than 200 million international subscribers. The top two networks (HGTV and Food Network) acquired in the Scripps transaction are available in more than 87 million households in the U.S. The international segment consists of national and pan-regional networks over 294 unique distribution feeds in 50 languages.

Contact
8403 Colesville Road
Silver Spring, MD, 20910
T +1 240 662-2000
Sector Communication Services
Industry Entertainment
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 9,800

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