Discovery, Inc. (NASDAQ: DISCA) is a global media company that distributes content through a variety of platforms, including linear platforms such as pay television, free-to-air television, and broadcast television, authenticated GO applications, digital distribution agreements, content licensing agreements, and direct-to-consumer (DTC) subscription products. As of September 30, 2021, it had 20 million paid DTC subscribers. It offers personalized content in around 50 languages in the United States and over 220 countries and territories.
Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
DISCA Daily Technical Chart (Source: REFINITIV)
DISCA's stock price has surged 30.42% in the past month and is currently trading in the lower-band of its 52-week range of USD 21.66 to USD 78.14. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 72.69, indicating an overbought zone. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 26.88.
Considering the uptick in the stock price, current valuation, and technical indicators, we believe the decent business fundamentals are adequately reflected at current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 30.20, up 0.57%, as of January 10, 2022, at 8:00 AM ET.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.