With the much anticipated WarnerMedia- Discovery combined entity finally listing on the stock exchange under its new ticker, Warner Bros Discovery, we’ve seen a generally buoyant reception. Blake & Wang P.A entertainment att
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orney, Brandon Blake, has the news.
Ticker: WBD
While their stock saw a small loss post-merger, as of Monday, Wall Street analysts actually gave the stock some love through upgrades from some key analysts. Atlantic Equities took the stock up to ‘overweight’ from ‘neutral, setting the target pricing at $40 per share. This upgrade was based mostly on the strong content brands from the two merged entities and what they see as a material mismatch in existing targets.
Evercore also upgraded the stock to ‘outperform’ from ‘in line’, with the same target share price. There’s also been strong support from Deutsche Bank analysts. Kraft analysts took the projected stock price higher, to $48, and a projected 194M subscribers by the end of 2026. MoffettNathanson stayed neutral, keeping predicted prices at $27 and citing elevated debt load and uncertainty about key staff positions as a reason to stay moderate.
Their prediction is that around 60% of existing Discovery subscriptions will carry over to the promised merged entity that will form with HBO Max. If true, this would leave them with around 83 million subs. Whilst lofty, this would leave them comparable to the current performance of Disney+, if you ignore Disney’s strong Indian performance. Will WBD indeed become the second-largest media company on the market? That, of course, remains to be seen. They certainly keep their $20B annual content spend and library with over 200,000 hours of content to offer. It’s not impossible.
Some Trading Inevitable
This comes despite the inevitable trading off we will see for some time to come. Some of the AT&T shareholders who received stocks in the newly-minted entertainment company will want to sell-off what they received in the deal. Currently, however, a bullish mood predominates, and most analysts seem to feel the selling will be short-lived. This is buoyed a little by the fact that this is the first time in four years investors will have direct access to Warner stock.
It’s certainly a rare ray of stock market confidence being shone on the slowing Direct-to-Consumer market, and it will be interesting to see how WBD lives up to the challenge in its first year post-merger.
