Warner Brothers Discovery stock rating reiterated at Market Perform by Bernstein

Investing.com - Bernstein SocGen Group has reiterated its Market Perform rating and $13.00 price target on Warner Brothers Discovery (NASDAQ:WBD), which currently trades at $16.17 with a market capitalization of $40 billion. According to InvestingPro data, analyst price targets range from $10 to $24.

The firm’s analysis suggests that Warner Brothers Discovery would serve as an enabler of long-term growth for subscale media players and commands a premium, noting that "an asset like this won’t be on the block for many years to come." The stock has shown strong momentum, surging 33.5% in the past week and trading near its 52-week high of $17.24.

Bernstein estimates the appropriate valuation range for the company’s Studios and Streaming (S&S) segment alone at $16-$20, implying 12 to 14x 2027 EBITDA, while highlighting that the declining Linear business still generates over $6 billion in EBITDA with high free cash flow conversion.

For strategic buyers like PSKY, the firm anticipates significant operating synergies in corporate functions, advertising operations, marketing, technology platforms, and studio properties that could drive expectations higher.

Bernstein notes that if no deal materializes in the current round of negotiations, WBD stock could surrender some recent gains, but emphasizes that the planned separation is moving forward and the S&S division "will be stronger on the other side."

In other recent news, Warner Bros. Discovery reported its Q2 2025 earnings, showcasing a notable revenue achievement of $9.81 billion, which exceeded the forecast of $9.73 billion. However, the company’s earnings per share (EPS) fell short, recording $0.63 against the expected $0.25, a significant deviation of -352%. Meanwhile, Paramount Skydance is reportedly preparing a cash-heavy bid for Warner Bros. Discovery, with backing from Oracle founder David Ellison, as reported by The Wall Street Journal. In analyst updates, both Wells Fargo and CFRA have raised their price targets for Warner Bros. Discovery to $14.00 from $13.00. Wells Fargo maintained an Equal Weight rating, highlighting the Studios and Networks segment’s potential as a merger and acquisition candidate. CFRA kept a Hold rating, noting the company’s planned corporate restructuring in 2026 as a positive development. Additionally, Nielsen ratings indicated a 54% year-over-year decline in broadcast primetime viewership for Q3 2025, according to a Goldman Sachs analysis. Cable network primetime ratings also saw a 28% year-over-year decline during the same period.

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