Guggenheim upgrades Warner Bros. Discovery to Buy, sees 31% potential upside

Guggenheim analyst Michael Morris upgraded Warner Bros. Discovery to Buy from Neutral with a $16.50 price target, which represents 31% potential upside. He sees "an attractive narrative" for the first half of 2023 given recently announced domestic affiliate renewals, strong cost controls, and the upcoming launch of a restructured Max product. While a challenging ad environment and continued cord-cutting are ongoing secular pressures, cost discipline at direct-to-consumer should boost confidence in the company’s ability to meet consensus 2023 EBITDA estimates and its own debt lowering goals, Morris contends.