Warner Brothers Discovery (WBD) PT Raised to $25 at Benchmark After Starting Strategic Review

Benchmark analyst Matthew Harrigan raised the price target on Warner Brothers Discovery (NASDAQ: WBD) to $25.00 (from $18.00) while maintaining a Buy rating.

The analyst commented, "We are increasing our price target on Warner Bros. Discovery to $25 from $18 with this morning’s indication its board has initiated a strategic review even as it expresses conviction a continued planned split best optimizes long-term value realization for current shareholders. WBD has received unsolicited bids from “multiple parties” in its entirety (likely a necessary evil from certain bidder vantage points) as well as isolating crown jewel Warner Bros. Linear cable networks do remain challenged across all media companies, including the cash cow nascent Discovery Global channels, although this is now amply offset by the Warner Bros. Studio and HBO Max reaching escape velocity for dramatic improvements in creative, operational and financial performance. This is achieved even after $5B+ in long-term cost reductions, highlighting remarkable studio and streaming cost fat and creative misfires during their Warner Media incarnation. Year-to-date box office share for Warner Bros. is a #1 27.4% coupled with substantial profitability for releases across broad genres – critically including a revived DC Studios – while CEO David Zaslav continues to express high confidence for achieving 150M + streaming subscribers next year, concentrated at HBO Max."

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