Why is Warner Bros Discovery (WBD) in stock today?
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Discovery of Warner Bros. (NASDAQ:WBD) the stock is up on Friday as investors react to new upgrades in the media company’s shares.
Wolfe Research begins the upgrades by raising WBD shares to an “outperform” rating. Previously, the company held a “peer performance” rating for WBD shares. For comparison, the consensus analyst rating for WBD stocks is “moderate buy.” This comes from the notes of 20 analysts.
Wolfe Research analyst Peter Supino said the following in a note to clients obtained by MarketWatch:
“After a 22 year full of negative surprises around the Warner-Discovery TV integration and advertising market, and after two rounds of forecast cuts, today’s expectations are attractive to underwrite.”
Another WBD stock upgrade
In addition to this, Wells Fargo has also upgraded WBD stock. This pushed the stock up to an “overweight” rating from an “equally weighted” rating. It also includes an increased price target of $20 per share. This represents a potential upside of 41.2% for the stock from Thursday’s closing price.
Wells Fargo analyst Steven Cahall made the following case in a note to clients, according to CNBC:
“We’ve tested the downside and expect WBD to successfully deleverage, and at a modest multiple that’s what should create the stock upside. We threw it all in and the kitchen sink in a Downside Case scenario for WBD, and it still moves to 3x by ’25E. We now believe that FCF is limiting declines, while the stock has an asymmetric upside.”
WBD stock is up about 1% on Friday morning.
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As of the date of publication, William White had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.