Communications
Joe Cornell offers a detailed analysis of WBD’s planned spin-off of its Streaming & Studios segments. The move mirrors a broader media trend to separate faster-growing streaming assets from legacy cable operations. The split enhances strategic flexibility - Streaming & Studios could become a more attractive M&A target, while Linear Networks might be paired with a similar business. Joe’s SOTP valuation yields a consolidated target price of $15.00 per share (adjusting for a ~20.0% stake in the Streaming & Studios businesses) for WBD, which implies a potential upside of ~30% from the current market price.
Edition: 215
- 11 July, 2025
Special Sits Idea Forum
While all the stocks presented at MYST's latest buyside event could be considered undervalued, many offered significant (i.e. >50%) upside. The most differentiated ideas included: Blackbaud (improving fundamentals more apparent post-EVERFI divestiture; potential M&A target); HealthEquity (new legislation fuelling dramatic TAM expansion + bond portfolio repricing tailwinds); and JBS (multiple to expand as US listing drives increased passive ownership / index inclusion). More familiar names discussed included: Fluor (huge NuScale Power (SMR) monetisation catalyst not reflected in Street estimates); Teva Pharmaceutical (generics cash cow enabling innovative branded portfolio pipeline development); and Warner Bros. Discovery (well positioned for media consolidation wave amid forthcoming business separation).
Edition: 214
- 27 June, 2025
Communications
Decades of price gouging and significant brand mismanagement was bound to cause Parks to slip up sooner rather than later. DIS will start FY25 with Parks growth flat (at best) and the well-known myriad of headwinds facing the Entertainment division. Warner Bros. Discovery just took a massive write-down on its linear networks. DIS will have to do the same at some point. Most importantly, modelling future EPS growth is only getting more difficult. EPS is topping out around current levels. What to pay for peak earnings? It is not 17x-25x. The new trading range for the stock as it slowly "dies" is $30-$75/share assuming $3.00-$5.00 of EPS and a 10x-15x multiple.
Edition: 193
- 23 August, 2024
Communications
High conviction mis-valuation opportunity only emphasised by Warren Buffet's increased investment in Paramount Global - Robert Sassoon argues Netflix’s woes are company specific (reliance on streaming subscriptions has simply laid bare its vulnerabilities). By contrast, WBD, PARA and Disney have diversified revenue models, backed up with high quality content libraries. WBD’s debt burden is also less onerous than it appears (very attractive fixed rate terms and interest payments will be dwarfed by FCF generation prior to the first repayment dates in 2024). Attributing a PARA-like value multiple to WBD's consensus 2023 EBITDA offers 80%+ upside.
Edition: 136
- 27 May, 2022
Communications
Plenty of value left on the table - why investors should play the pending Discovery / WarnerMedia merger through AT&T. Robert Sassoon’s conservative TP of $41 for Warner Bros. Discovery still offers 40%+ upside from the prevailing share prices of both DISCK/DISCA. However, with AT&T trading on an EV/Consensus 2023 EBITDA multiple of ~7x, and assuming AT&T ex-WM continues to be valued at a similar multiple, then purchasing AT&T shares now gives investors a ~65% cheaper option to purchase WBD shares than through DISCK.
Edition: 127
- 21 January, 2022
Discovery (DISCK)
Communications
Robert Sassoon explains why market apathy towards Discovery’s merger with AT&T's WarnerMedia is a gift to value investors and believes the $43bn deal will give Warner Bros. Discovery a real shot at competing more effectively in the DTC streaming market. Robert sees 30%+ upside over the next 12-15 months (based on a very conservative 10x 2023 EV/EBITDA), with the prospect of a greater than 100% return should investors become “a little more excited” about WBD's streaming service strategy as they have done with Netflix and Disney.
Edition: 112
- 11 June, 2021