Imperial Raises Discovery, Inc (DISCA) PT While Talking Down EPS

Imperial Capital analyst, David Miller, reiterated his Outperform rating on shares of Discovery Communications (NASDAQ: DISCA) and raised his price target to $32 from $31 while cutting number with one month to go in the quarter. There is still one more month in the quarter but the analyst finds two problems with consensus, the exposure to FX volatility and the fact that consensus EPS is “inefficient” because it blends GAAP and non-GAAP
estimates. The company has announced $80.0mn in restructuring charges due to the Scripps acquisition making the spread between GAAP and non-GAAP EPS results fairly substantial when DISCA reports its fiscal 3Q in the first week of November.

Currency is also a major issue this quarter and the analyst stated "with DISCA deriving 47.7% of overall revenues and 32.1% of EBITDA from overseas, DISCA is particularly sensitive to currency translation. Indeed, since our last report on DISCA, dated 8/7/18, the U.S. dollar (USD) has rallied 10.6% against most Latin American currencies, and 11.2% alone against the Brazilian Real, which is DISCA’s most critical Latin American market".

For an analyst ratings summary and ratings history on Discovery Communications click here. For more ratings news on Discovery Communications click here.

Shares of Discovery Communications closed at $28.34 yesterday.

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