Morgan Stanley analyst Benjamin Swinburne maintained a Hold rating on Warner Bros (WBD – Research Report) today and set a price target of $10.00.
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Benjamin Swinburne has given his Hold rating due to a combination of factors impacting Warner Bros Discovery. The company has been actively working to integrate WarnerMedia and Discovery while cutting costs since their merger in April 2022. However, these efforts have been overshadowed by the ongoing challenges of cord-cutting and audience declines in linear networks, as well as the unfavorable conditions in public equity markets.
These challenges have resulted in lower trading multiples despite healthy cash flow, masking the strategic value of Warner Bros’ studio assets and the growing contribution of HBO Max. The proposed separation of Streaming & Studios from Global Networks is seen as a potential catalyst for unlocking value, but its success hinges on delivering growth in these areas. As such, Swinburne maintains a Hold rating, reflecting the balance between potential growth opportunities and the current market headwinds.
Swinburne covers the Communication Services sector, focusing on stocks such as Spotify, Charter Communications, and Sphere Entertainment. According to TipRanks, Swinburne has an average return of 14.0% and a 60.74% success rate on recommended stocks.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $11.00 price target.