• by Wayne Friedman , June 7, 2016

Discovery Communications stock took a hit on Tuesday after comments and a downgrade from a media analyst.

Discovery’s stock fell around 4% in early trading to $27.68.

Todd Juenger, senior analyst at Bernstein Research, says the company has “strayed well off-brand over the past couple of years.” He adds that many networks have shown “fatiguing” audiences at core program franchises.

Juenger says a fair 12-month value is now at $23 a share. He also worries that Discovery has too many domestic networks, at 14 (but less than Viacom). All this will make it difficult for channel carriage in growing “skinny” pay TV bundles that have been starting up.

He adds that Discovery’s international TV investments in SBS Nordic and Eurosport are acquisitions made in “slower growing markets.”

Still, Juenger believes “Discovery's business has many attractive elements" and says the company is "run by aggressive, globally- and forward-leaning management.” This includes a brand that has positive appeal, content that is low in cost, and ubiquitous global distribution in the entry-level tiers.

Juenger forecasts that in the third quarter Discovery could see a 1% decline in advertising revenue. Some of this coming at the expense of Olympic TV advertising spent on other networks/platforms.

Looking at other more positive media company news, Juenger says CBS Corp. and Scripps Networks Interactive are positioned better.

Neither has too many networks in their respective groups, and both have unique advertising advantages -- CBS with reach, Scripps Networks Interactive with endemic advertisers and audiences.