We’ve been following the drama surrounding media company Paramount (NASDAQ:PARA) and its sale to one of three potential suitors. But what if one of the biggest beneficiaries of the sale isn’t Paramount or one of its potential buyers? What if the biggest winner is actually a competitor, entertainment giant Warner Bros Discovery (NASDAQ:WBD)? The possibility has come up, and Warner is up nearly 4% in Monday afternoon’s trading.
Warner’s potential win comes with one key component of Paramount: CBS News. Reports suggest that Warner has had an eye on CBS for some time now, and if it were to suddenly come available—as it might in at least one of the four potential outcomes for the hunt for Paramount—it would make CNN a news force of incredible magnitude.
It also might incense regulators, but assuming it got through that hoop unscathed—which isn’t a foregone conclusion given the activist nature of the Federal Trade Commission (FTC) under Lina Khan—it would be a serious coup. There would be quite a few issues, like the local affiliates, to consider, but it could still breathe new life into CNN, which sorely needs it.
Meanwhile, Upfront Season
And while this potential game-changer is stewing in the background, Warner is also taking on upfront season amid an environment where advertisers are looking to put more bets on digital streaming. With the writers and actors’ strikes now settled for the next few years and cost-cutting mostly concluded, many are looking forward to a big new season of potential buys. While traditional TV is expected to make solid sales—up 1% to $18.79 billion this year—it’s streaming that will be the house afire, surging almost a third to reach $16.45 billion.
Is Warner Bros. Discovery Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 12 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 33.88% loss in its share price over the past year, the average WBD price target of $12.53 per share implies 47.93% upside potential.
