It was good news, if of the mildest sort, for entertainment giant Warner Bros. Discovery (NASDAQ:WBD) today. It announced plans to crack down on password sharing, a move that worked brilliantly for Netflix (NASDAQ:NFLX). Will it work for Warner? Investors sure hope so; they sent shares up fractionally in the last minutes of Tuesday’s trading.
Warner’s plan to restrict password sharing on Max, its streaming platform, will start up this year and ramp up into 2025, so there’s a good chance current password sharers will be able to continue doing so for a while. While the plan worked wonders for Netflix, Warner—as represented by head of global streaming and games JB Perrette—hurried to temper expectations, saying, “I’m conscious of not over-selling (the password crackdown) because you see Netflix’s success.”
After all, Perrette noted, Netflix had been streaming for 17 years. That’s a lot of users sharing passwords. Warner, by comparison, is likely to have far fewer sharing customers to begin with.
Will Lightning Hit Twice?
Warner is likely hoping for anything like what Netflix saw after the password crackdown; Netflix saw its membership numbers for the ad-supported tier rise 70%, a goal any streaming platform would crave. And while this isn’t likely to be the case for Warner, any amount of gain will not go unwelcome. Meanwhile, it’s still got the sports streaming platform, which will likely prove a welcome move assuming Fubo (NYSE:FUBO) and its lawsuit doesn’t torpedo the whole thing before it can begin in earnest.
Is Warner Bros Discovery a Good Buy Right Now?
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 46.13% rally in its share price over the past year, the average WBD price target of $13.61 per share implies 67.1% upside potential.
