Matthew Harrigan, Benchmark's analyst, said in a statement that he recommended a buy rating on Warner Bros. Discovery, Inc, WBD has a price target of $26.00.
The re-rating reflects cautious valuation criteria allowing headroom, especially as investors gain confidence in long-term earnings power.
Even though media companies and the equity market have taken a more rational approach toward excessively streaming-centric strategies, WBD is now pivoting from maiden-year restructuring initiatives toward a 2023 emphasis on relaunching and building its business.
The analyst points out that recent soft stock performance does not reflect the long-term resilience of the underlying businesses and a reasonable likelihood of achieving $4.0 billion in total merger cost savings.
Direct to Consumer D 2 C losses should reach breakeven in 2024 with a potentially reasonable $1 billion 2025 profit objective.
Warner Bros. is prioritizing theater over immediate streaming on the Max streaming platform, with Blue Beetle being converted from direct-to-streaming to a theater release from direct-to-streaming.
The Brave and the Bold are some of the future shared universe movies that will be released after 2023, including Superman: Legacy and Batman. The Batman Part Two and Joker: Folie a Deux standalone event editions are among the offerings for standalone events.
Strong superhero movie movie execution is now critical with a weak $132.9 million global tally for March DC release Shazam of just $132.9 million globally following a feeble performance from rival Marvel's Ant-Man and the Wasp: Quantumania.
Reactions at Cinemacon yesterday after a full screening of DC Comics' The Flash were very positive as Warner Bros. unusually screened the entire film nearly two months before its June 16 release.
Benchmark analyst Mike Hickey suggests the cinemacon mood is that DC Comics is finally on sound footing with the new ten-year plan from co-heads James Gunn and Peter Safran.
Shares of WBD closed lower on Wednesday at $12.61, down from a loss of 1.56 percent on the Nasdaq Stock Market.