In-Line End to Warner Bros. Discovery's 2022; Lower DTC Losses Accompanied by Weak Top-Line Growth

Weak advertising results at the networks segment again hampered Warner Bros. Discovery's performance during its third quarter as a combined entity. However, the focus on cost-cutting at the direct-to-consumer segment appears to be working as the adjusted EBITDA loss decreased sequentially and year over year. While we think investors are looking for lower losses for DTC segments across the media industry, we also believe that those improvements cannot be combined with weak top-line and subscriber growth, as seen this quarter for WBD. We are maintaining our $30 fair value estimate.