Guggenheim analyst Mike Morris reiterated a Neutral rating on Warner Brothers Discovery (NASDAQ: WBD).

The analyst commented: "We update our Warner Bros. Discovery model ahead of 2Q earnings, raising our consolidated EBITDA estimate to $1.87bn (vs. $1.85bn prior), roughly in line with Street consensus of $1.87bn. The reduction reflects a lighter Studios quarter, where we forecast EBITDA could decline ~65% y/y to $300mm given the 2Q film slate (Supergirl, Mortal Kombat II, The Mummy) is tracking below expectations, faces a difficult comparison against last year's strong theatrical slate (A Minecraft Movie, Sinners, Final Destination: Bloodlines), and laps a large intercompany licensing deal. At Networks, we forecast advertising down 21% as the NBA headwind intensifies to ~20% (vs. 5% in 1Q), partially offset by ~400bps net benefit from NCAA/NHL Stanley Cup and modest improvement in underlying domestic trends (down HSD ex-items). International advertising continues to outperform, particularly in EMEA. Consistent with our prior view, we expect continued subscriber-related revenue acceleration at Streaming as the company laps the former related-party distribution deal, with full impact felt in 3Q. The U.K. market presents potential upside as wholesale Sky subscribers on ad-lite tiers increase engagement, while Germany retail uptake through the Amazon Prime Video Channels partnership has been healthy. We maintain our NEUTRAL rating with no price target pending the Paramount Skydance transaction close, expected in 3Q26."

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Shares of Warner Brothers Discovery closed at $26.12 yesterday.