Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul>
<li>Disney is scheduled to release its Q2 2023 results later this week.</li>
<li>A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.</li>
<li>The macroeconomic environment is also supportive for Disney's Parks, Experiences and Products segment.</li>
</ul>


Disney is scheduled to release its Q2 2023 results later this week.
A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.
The macroeconomic environment is also supportive for Disney's Parks, Experiences and Products segment.


Disney's Q2 2023 Earnings: Now Is The Time To Deliver

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Credit

<ul><li>Discovery is a major global media company that is going through a turbulent phase.</li><li>In terms of direct-to-consumer, they are successfully moving towards their objective of realizing profitability in streaming, a significant and potent part of their business.</li><li>Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.</li></ul>

Discovery is a major global media company that is going through a turbulent phase.In terms of direct-to-consumer, they are successfully moving towards their objective of realizing profitability in streaming, a significant and potent part of their business.Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.

Warner Bros. Discovery Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

Equity Capital Markets

Warner Bros Discovery  / Equity Capital Markets

<ul><li>This is our first report on global media behemoth, Warner Bros.</li><li>The company had a dismal fourth quarter and failed to meet the revenue expectations as well as the earnings expectations of Wall Street.</li><li>We initiate coverage on the stock of Warner Bros.</li></ul>

This is our first report on global media behemoth, Warner Bros.The company had a dismal fourth quarter and failed to meet the revenue expectations as well as the earnings expectations of Wall Street.We initiate coverage on the stock of Warner Bros.

Warner Bros. Discovery Inc.: Initiation of Coverage – Enhanced Distribution of Underutilized Franchises & Other Drivers

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<ul>
<li>Netflix is now up 50% from its lows on hope that advertising and paid sharing drive a revenue reacceleration and multiple rerating. Part B has happened.</li>
<li>Advertising uptake will be slow. But consensus has 55M incremental ad-subs (20% of the total) and $8B in revenue assumed in 2025! </li>
<li>Netflix intends on keeping content spending flat for the next few years, raising the importance of its hit rate - which has not been Netflix's forte.</li>
</ul>


Netflix is now up 50% from its lows on hope that advertising and paid sharing drive a revenue reacceleration and multiple rerating. Part B has happened.
Advertising uptake will be slow. But consensus has 55M incremental ad-subs (20% of the total) and $8B in revenue assumed in 2025! 
Netflix intends on keeping content spending flat for the next few years, raising the importance of its hit rate - which has not been Netflix's forte.


<ul>
<li>Multiple negative data points have come out reflecting limited initial uptake for Netflix's ad-based tier.</li>
<li>(We think) Netflix lack of AVOD uptake is due to it being fully saturated in its major markets wheras competing services starting from scratch have higher AVOD uptake.</li>
<li>Lack of incremental subs from AVOD points towards a weaker than expected 4Q22 and downside to guidance...not good for a stock that has ripped since 2Q22 earnings.</li>
</ul>


Multiple negative data points have come out reflecting limited initial uptake for Netflix's ad-based tier.
(We think) Netflix lack of AVOD uptake is due to it being fully saturated in its major markets wheras competing services starting from scratch have higher AVOD uptake.
Lack of incremental subs from AVOD points towards a weaker than expected 4Q22 and downside to guidance...not good for a stock that has ripped since 2Q22 earnings.


United States

Warner Bros. Discovery, Inc. operates as a media and entertainment company. The Company offers a complete portfolio of content, brands, and franchises across television, film, streaming, and gaming.

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Warner Bros Discovery (WBD US)

Disney's Q2 2023 Earnings: Now Is The Time To Deliver

Disney is scheduled to release its Q2 2023 results later this week. A number of factors are pointing to a strong and a better than expected...

Vladimir Dimitrov, CFA

Warner Bros. Discovery Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

Discovery is a major global media company that is going through a turbulent phase. In terms of direct-to-consumer, they are successfully moving...

Baptista Research

Warner Bros. Discovery Inc.: Initiation of Coverage – Enhanced Distribution of Underutilized Franchises & Other Drivers

This is our first report on global media behemoth, Warner Bros. The company had a dismal fourth quarter and failed to meet the revenue...

Baptista Research

Netflix 4Q22: Priced for Perfection

Netflix is up 50% from its lows based on investors pricing in a successful ad tier and a churnless paid sharing crackdown. Bulls point to $400, we...

Aaron Gabin

Netflix AVOD Not Chill

We think Netflix's lack of AVOD uptake is due to full saturation, and unless paired with cracking down on passwords, will not generate incremental...

Aaron Gabin

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