Discovery Communications (DISCA) PT Lowered to $30 at Imperial Capital

Imperial Capital analyst David Miller lowered the price target on Discovery Communications (NASDAQ: DISCA) to $30.00 (from $32.00) on Lower Scatter Volume and currency headwinds.

The analyst maintained an Outperform rating stating "As the quarter comes to a close, we are fine-tuning our 2Q estimates on DISCA by extracting $100mn of revenue and $0.02/share in GAAP EPS out of our models to account for a combination of weaker scatter activity than we had assumed at the beginning of the quarter, a slower return of Sports activity on Eurosport and ‘D-play’ than we had assumed at the beginning of the quarter, and the effects of currency, which continues to slam S&P 500 multinationals because of the strength of the USD, mostly due to the effects of the recent recovery of WTI crude. At a recent conference, CFO Gunnar Weidnefels described DISCA’s network scatter business as “fairly robust given the current environment,” but we think that has more to do with constriction of available inventory more than anything else, as DISCA took advantage of fairly robust upfront pricing in the summer of 2019 (pre-COVID of course) when confidence amongst advertisers was fairly high".

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