Corus Entertainment Plummets after Warner (NASDAQ:WBD) Loss – TipRanks.com

There are a lot of worried faces over at Corus Entertainment (CJREF) today as the Canadian entertainment giant announced potential financial trouble after the loss of Warner Bros Discovery (WBD) content. The news hit shareholders like a bus dropping from low-earth orbit, and Corus lost over 23% in Tuesday morning’s trading.

Corus’ news was a litany of disasters. It revealed that advertising revenue is in open decline, and the company may soon be in breach of debt covenants. Moreover, it’s planning further “restructuring” measures to address the firestorm of losses it’s taking right now, which caused Corus stock to hit a record low at one point.

Corus even brought out a “going concern” warning following its last quarterly figures, and with the loss of several Warner properties, including The Food Network and HGTV—both of which are making the move to Rogers Communications (RCI) in January—it’s not going to get better. Not that it was likely to get better anyway, given the fragile state of linear television as a whole.

“Restructuring” Means “Massive Job Cuts”

When you put out a warning like that, it means a lot of people are about to lose their jobs. In fact, over the next six weeks, Corus plans to let go of another 300 workers. That would bring its cumulative losses up to about 800, or roughly one in every four employees. Reports also noted that two AM radio stations, one in Edmonton and one in Vancouver, would be lost as a result.

Again, given the state of broadcast television and linear cable these days, it’s little surprise to see issues like these. They are always disheartening but never surprising; from Fox (FOXA) to Paramount (PARA), the decline of advertising on TV is well-known and widely seen. Corus is no different here.

Is Corus a Good Stock to Buy?

Turning to Wall Street, analysts have a Moderate Sell consensus rating on CJREF stock based on three Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 92.48% loss in its share price over the past year, the average CJREF price target of $0.22 per share implies 158.82% upside potential.

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