Entertainment giant Warner Bros. Discovery (NASDAQ:WBD) discovered, to its undoubted delight, that it had a winner in Timothee Chalamet. But apparently, not enough of a winner for shareholders. Warner put out a major new deal for Chalamet, and investors revolted, sending shares down modestly in Tuesday afternoon’s trading.
Chalamet was closely connected with two of Warner’s biggest hits in quite some time: Wonka, the prequel about chocolatier and madman Willy Wonka, and Dune: Part Two, the sequel to the remake of Dune released back in 2021. Taken together, Wonka and Dune: Part Two pulled in a combined total of over $1.1 billion, which made them and Chalamet winners.
In fact, he’s the first actor in 40 years to ever star in the two biggest-grossing films in an eight-month time frame. That’s likely why Warner signed him to a multi-year first-look feature deal.
A Turnaround Is in the Cards
It’s no secret that Warner has suffered over the last few years. Strikes, pandemic-related closures, and a host of other problems have set upon the studio. Indeed, reports note that those who put cash in the stock three years ago have lost 80% of its value at this point. Even those who bought in the last year are down 40%. However, some believe a turnaround is in the cards and that Warner stock is currently undervalued.
While the pay-TV market is getting hit hard, its studio line is doing well—as we just saw with the Chalamet deal—and its direct-to-consumer market is holding up well, too. Throw in a library of intellectual property that spans decades, and there are clear possibilities here.
What Is the Stock Price Prediction for Warner Bros Discovery?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on nine Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 41.63% loss in its share price over the past year, the average Warner Bros Discovery price target of $13.61 per share implies 62.51% upside potential.
