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Is this Large Market Cap Stock target price reasonable for Discovery Communications, Inc. (NASDAQ:DISCA)?

The company in question is, Discovery Communications, Inc. (NASDAQ:DISCA) currently with a stock price of 26.26 (-0.25% today). The market cap for Discovery Communications, Inc. is 10428.26, and is in the sector Services, and CATV Systems industry. The target price for Discovery Communications, Inc. is 28.95. Currently Discovery Communications, Inc. is trading with a P/E of 16.24, and a forward P/E of 11.86. Average volume for Discovery Communications, Inc. is 3635.72 and so far today it is 833928.

Performance in the last year for Discovery Communications, Inc. has been -11.88%. For EPS growth, Discovery Communications, Inc. has seen a growth of -4.80%, and is looking to grow in the next year to 12.86%. More long term stats show that EPS growth has been 1.00% over the last five years and could be 14.27% for the next five years. Discovery Communications, Inc. has seen sales growth quarter over quarter at 3.30%, with EPS growth quarter over quarter at 51.70%. The 20-day simple moving average is 1.25%, with the 200-day simple moving average coming to -4.06%.

Since the IPO date for Discovery Communications, Inc. on the 7/8/2005, Discovery Communications, Inc. has seen performance year to date to be -1.31%. With Discovery Communications, Inc. trading at 26.26, the dividend yield is *TBA, and the EPS is 1.62.

So could Discovery Communications, Inc., be undervalued? Well as said before P/E is 16.24. The PEG is 1.14, P/S is 1.62 and the P/B is at 1.99. The P/cash is 56.37, with P/free cash flow at 8.84.

Discovery Communications, Inc. ability to deal with debt shows that the current ratio is 1.8, and the quick ratio is 1.8. This is with long term debt/equity at 1.46, and total debt/equity at 1.49.

In terms of margins, Discovery Communications, Inc. has a gross margin of 63.10%, an operating margin of 31.50% and a profit margin of 12.00%.Payout ratio for Discovery Communications, Inc. is 0.00%. Return on assets come to 4.90% with return on investment coming to 11.20%.

Insider ownership for Discovery Communications, Inc., is at 0.60% and institutional ownership comes to *TBA. Outstanding shares are at 396.06. While shares float is 393.17. The float short is currently 6.17%, and short ratio is 6.67.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Stephen Butters

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