Warner Bros. Discovery (WBD) gains on two upgrades; WF sees 'asymmetric upside'

Warner Brod Discovery (NASDAQ: WBD) shares are moving higher in pre-market Friday after two sell-side analysts raised their recommendation on the stock.

Wolfe Research now rates the stock as Outperform (prior Peer Perform) with the price target of $20 per share implying an upside potential of over 40% relative to yesterday’s close.

“Almost a year post-merger, guidance & the stock are lower while internal visibility is higher. Execution, free cash flow & deleveraging improve in 2023-24. Stock price in a draconian pay-TV scenario. Public LBO w/ strategic exit possibilities,” analyst Peter Supino wrote in a client note.

Similarly, Wells Fargo analyst Steven Cahall upgraded to Overweight from Equal Weight.

“We threw everything and the kitchen sink at a Downside Case scenario for WBD, and it still delevers to 3x by '25E. We now have conviction in FCF to limit downside, while the stock has asymmetric upside. Upgrade on risk/reward, $20 target.”

By Senad Karaahmetovic

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