DISC.A – Given management’s confidence in their growth, market share, and advertising revenue, market expectations are far too bearish, suggesting longer-term upside remains warranted

• Discovery, Inc. (DISC.A:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings with a 9.6x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence about their international growth, market share, and advertising revenues
• Specifically, management generated an excitement marker when saying their UKTV lifestyle business will add 2%-3% of international advertising revenue growth next quarter, and they are confident their market share across their top 10 international countries grew 5% this quarter. Furthermore, they are confident their audience delivery was up an average of 4% internationally and that they have content, brand credibility, and IP in every international country in which they operate. Moreover, they are confident 5G will provide future business opportunities and that their scale gives them an advantage when competing internationally. Finally, they are confident that they saw 5% U.S. affiliate growth in Q2.