Corus Entertainment stock plunges over 20% to new 52-week low

The Corus logo inside Corus Quay in Toronto is photographed on Friday, June 22, 2018. Corus Entertainment Inc. is cutting its quarterly dividend.THE CANADIAN PRESS/Tijana Martin) shares sank to a new 52-week low on Tuesday as analysts predict the loss of content from Warner Brothers Discovery could cost the Canadian media company over $150 million in lost revenue next year.

CIBC Capital Markets analyst Scott Fletcher downgraded Corus shares to “underperformer” from “neutral,” while slashing his price target from $0.85 per share to $0.25. He estimates the programming Corus is set to lose could result in as much as $150 million in lost revenue next year, and $40 million in lost profit.

“With Corus already facing the pressure of a declining advertising market, the additional hit to revenue calls Corus’ financial future further into question,” Fletcher wrote in a note to clients. “We have decreased our target multiples to reflect the higher risk profile associated with the step-back in earnings visibility against the backdrop of a still sluggish television advertising market and elevated leverage,” he noted in a report.Citing Canadian Radio-television and Telecommunications Commission specialty channel data, McReynolds says the five Corus channels impacted by the loss of Warner Brothers Discovery content generated about $155 million in regulated revenue in 2022.

Source: News Formal (newsformal.com)

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