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.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
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.
