WBD
Warner Bros. Discovery, Inc.
$26.74
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 136.8% above fair value
You pay
$26.74
Bear
$11.29
Fair
$11.29
Bull
$14.80
Bear
$11.29
-57.8%
3% stage 1 growth, 12% discount
Fair
$11.29
-57.8%
3% stage 1 growth, 12% discount
Bull
$14.80
-44.7%
4% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
28%
Implied Market Multiple
30.8x
Market is pricing in (growth)
16.7%
vs 3.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $30.80 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $11.29 per share.
Warnings
Wall Street's average price target is $30.80 (from 32 analysts). Our estimate is 90% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions