Warner Brothers Discovery (WBD) stock: Upside 'fat tail' risk increasingly evident, says analyst

Benchmark analyst Matthew Harrigan reiterated a Buy rating and $25.00 price target on Warner Brothers Discovery (NASDAQ: WBD).

The analyst commented, "We maintain a Buy rating and $25 price target for Warner Bros. Discovery, allowing for some time discount to any deal close and very significant regulatory challenges, although upside ‘fat tail’ risk is now increasingly evident. Our 2026 sumof-the-parts estimate was $28, although the $27.75 Netflix bid price pulls value above $30 with some allowance for a debt laden Discovery Global Networks spin-off. The Warner Bros. studio and HBO Max constitute a remarkably positive fit with Netflix (NFLX-Hold, followed by Dan Kurnos) although regulatory, legal and political challenges are conveyed not only by Paramount Skydance’s aggressive letter but also by yesterday’s Directors Guild of America statement expressing concerns over the possible throttling of theatrical creative activity and competition for talent if the deal proceeds. DGA concerns clearly play into reports, including from The New York Post, that the DOJ’s antitrust division may mount a comprehensive multiyear investigation into Netflix if it is in the winner in the bidding war. The antitrust argument subject to major political influence, as Benchmark StoneX has previously discussed, hinges heavily on streaming market definition especially the treatment of YouTube’s accelerating share."

For an analyst ratings summary and ratings history on Warner Brothers Discovery click here. For more ratings news on Warner Brothers Discovery click here.

Shares of Warner Brothers Discovery closed at $24.54 yesterday.

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