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.