Bernstein analyst Laurent Yoon maintained a Hold rating on Warner Bros yesterday and set a price target of $23.50.
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Laurent Yoon has given his Hold rating due to a combination of factors influencing Warner Bros’ current and future performance. The company’s Q3 results have shown that its Studios and Streaming segments are on track to meet ambitious financial goals for 2025, with the Studios expected to deliver $2.4 billion in EBITDA and Streaming targeting $1.3 billion. However, the anticipated growth in the Studios segment for 2026 seems challenging, as the content slate does not appear significantly stronger than the previous year, indicating potential downside risks.
Additionally, while the Streaming segment is progressing towards its subscriber goals, the decline in ARPU due to adjustments in legacy distribution deals and a shift towards AVOD subscribers poses a concern. Despite these pressures, international subscriber growth is expected to offset the ARPU decline, supporting the overall growth strategy. The current market valuation and potential acquisition bids suggest that while Warner Bros is in a stable position, the prospects for significant upside are limited, justifying a Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $20.00 price target.
WBD’s price has also changed dramatically for the past six months – from $8.430 to $22.420, which is a 165.95% increase.