Dell falls as soft current quarter guide offsets Q2 beat, full-year outlook lift
Investing.com - KeyBanc raised its price target on Warner Brothers Discovery (NASDAQ:WBD) to $18.00 from $13.00 on Wednesday, while maintaining an Overweight rating on the stock. The media giant, currently valued at $33 billion, has shown strong momentum with a 49% return over the past year and is trading near its 52-week high of $13.87.
The investment firm cited a positive second-quarter outlook for the media company, expecting Warner Brothers Discovery to exceed expectations on total revenue and adjusted EBITDA, with upside potential in its Studios and Direct-to-Consumer (DTC) segments. The company generated $38.3 billion in revenue and $7.6 billion in EBITDA over the last twelve months.
KeyBanc anticipates Warner Brothers Discovery will raise its DTC EBITDA guidance to more than $1.4 billion and projects Studios EBITDA to improve to nearly $2.5 billion in 2025.
The firm also noted that a recent tender offer should improve net leverage by approximately $3 billion, potentially resulting in consolidated leverage of around 3.5x by year-end 2025.
KeyBanc believes the planned spin-off of Streaming and Studios from Global Networks should unlock shareholder value, with the firm valuing the Streaming and Studios segment at approximately 11x pro forma EBITDA and Global Networks at about 6x EBITDA.
In other recent news, Warner Bros. Discovery has announced significant changes in its executive lineup in anticipation of its planned separation into two publicly traded entities. Fraser Woodford will take on the role of Chief Financial Officer, and Brian Rauch will become Chief Accounting Officer once the separation is finalized. This corporate split, expected in mid-2026, will result in two distinct companies: "Warner Bros." for streaming and studios, and "Discovery Global" for television networks. Additionally, Warner Bros. Discovery has expanded its partnership with VideoAmp to enhance currency measurement options for advertisers across various platforms, supporting future planning and transactions.
On the financial front, UBS has raised its price target for Warner Bros. Discovery stock to $10.00, maintaining a Neutral rating. The firm anticipates "solid improvement" in streaming and studios profitability, with forecasts of $9.86 billion in revenues and $1.91 billion in EBITDA for the upcoming quarter. Meanwhile, Benchmark has reiterated its Buy rating with an $18.00 price target following the successful launch of the new Superman movie, which achieved a $122 million North American box office and $217 million globally during its opening weekend.
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