NEW YORK (TheStreet) -- Topeka Capital Markets lowered its price target on Discovery Communications (DISCA) - Get Reportstock to $39 from $40 on Tuesday, ahead of the release of the company's 2015 third quarter earnings results.
The Silver Spring, MD-based media company will report earnings before the market open on Nov. 3. The firm maintained its "buy" rating on the stock.
Topeka analysts project that Discovery will report third quarter earnings of 39 cents per share on revenue of $1.57 billion for the most recent quarter.
The Street's consensus estimate is for earnings of 38 cents per share on $1.58 billion in revenue, the firm said.
Shares of Discovery were down by 1.13% to $28.96 in early morning trading on Tuesday.
Separately, TheStreet Ratings team rates DISCOVERY COMMUNICATIONS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate DISCOVERY COMMUNICATIONS INC (DISCA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Even though the current debt-to-equity ratio is 1.31, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.10 is sturdy.
- The share price of DISCOVERY COMMUNICATIONS INC has not done very well: it is down 15.60% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Media industry average. The net income has decreased by 24.5% when compared to the same quarter one year ago, dropping from $379.00 million to $286.00 million.
- You can view the full analysis from the report here: DISCA