Will Wall Street analysts forecast an upward or downward trajectory for Warner Bros. Discovery's stock value?
Warper Bros. Discovery: A Global Media Giant Facing Tough Times
With a market cap of $21.3 billion, Warper Bros. Discovery, Inc. (WBD) is a leading global media and entertainment behemoth. Operating through its Studios, Network, and Direct-to-Consumer (DTC) segments, WBD boasts an impressive portfolio of iconic brands and franchises, such as HBO, CNN, Discovery Channel, Warner Bros. Pictures, DC, HGTV, and Max. However, the New York-based company's shares have faced a rocky ride, outperforming the broader market over the past 52 weeks yet trailing behind in the current year.
Over the past 52 weeks, WBD shares have soared 17.8%, outperforming the S&P 500 Index's 10.6% rally. Yet, the company has struggled, with shares down nearly 18% on a YTD basis, lagging behind the S&P 500's 5.3% decline.
Wall Street's obsession with startups has led some investors to shy away from traditional media and entertainment companies like WBD. But fear not, for this company offers an opportunity to bypass Wall Street's bias and reap the benefits of a diversified media powerhouse.
Focusing on the details, WBD has fallen behind the Communication Services Select Sector SPDR ETF Fund (XLC)'s stunning 22.6% gain over the past 52 weeks. Despite reporting a weaker-than-expected Q4 2024 loss of $0.20 per share and revenue of $10 billion, WBD shares rose 4.8% on Feb. 27. The rise was driven by the addition of 6.4 million DTC subscribers, bringing the total to 116.9 million and a growth in DTC revenue to $2.7 billion. Adjusted EBITDA improved 10.2% year-over-year to $2.7 billion, thanks to the growth in DTC and Studios segments.
For the current fiscal year, ending in December 2025, analysts expect WBD's loss per share to grow 97.2% year-over-year to $0.13. WBD's earnings surprise history is mixed, with the company beating the consensus estimates in one of the last four quarters and missing on three other occasions.
Among the 25 analysts covering the stock, the consensus rating is a "Moderate Buy." That's based on 11 "Strong Buy" ratings, one "Moderate Buy," and 13 "Holds." On Apr. 4, Raymond James analyst Ric Prentiss lowered Warner Bros. Discovery's price target to $13 but maintained an "Outperform" rating, citing strong core assets despite concerns over leverage and linear TV exposure. As of writing, WBD is trading below the mean price target of $12.24, with the Street-high price target of $18 implying a potential upside of 107.6% from current price levels.
In essence, while WBD faces steep competition and financial hurdles, its significant brand portfolio, strategic partnerships, and upcoming content releases like Furiosa: A Mad Max Saga and A Minecraft Movie warrant a closer look for investors seeking to traverse the choppy waters of the media and entertainment sector.
- Despite WBD's impressive portfolio and stronger performance over the past 52 weeks compared to the S&P 500, its shares have shown a weaker performance in the current year, down nearly 18% on a YTD basis.
- The financial forecast for WBD points to a loss per share growing 97.2% year-over-year to $0.13 for the fiscal year ending in December 2025.
- Although WBD has struggled and is lagging behind the Communication Services Select Sector SPDR ETF Fund and faces competition and financial hurdles, its significant brand portfolio, strategic partnerships, and upcoming content releases like Furiosa: A Mad Max Saga and A Minecraft Movie might attract investors.
- Among analysts covering the stock, the consensus rating for WBD is a "Moderate Buy," with a price target of $13, potentially implying an upside of 107.6% from current price levels.
