With a market cap of $21.3 billion, Warner Bros. Discovery, Inc. (WBD) is a global media and entertainment company operating through its Studios, Network, and Direct-to-Consumer (DTC) segments. It owns and distributes a broad portfolio of iconic brands and franchises, including HBO, CNN, Discovery Channel, Warner Bros. Pictures, DC, HGTV, and Max, across television, film, streaming, gaming, and digital platforms worldwide.
Shares of the New York-based company have outperformed the broader market over the past 52 weeks. WBD has gained 17.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 10.6%. However, shares of WBD are down nearly 18% on a YTD basis, lagging behind SPX’s 5.3% decline.
Focusing more closely, the operator of cable TV channels has lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 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 company added 6.4 million DTC subscribers in the quarter, bringing the total to 116.9 million, while DTC revenue grew 5% to $2.7 billion. Adjusted EBITDA improved 10.2% year-over-year to $2.7 billion, driven by growth in the DTC and Studios segments. Investors were further reassured by management’s strategic focus on international DTC expansion and reducing the $34.6 billion in net debt.
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. The company's earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while 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. The Street-high price target of $18 implies a potential upside of 107.6% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
