KeyBanc downgrades Warner Bros. on uncertainty over Paramount deal

KeyBanc downgraded Warner Bros. Discovery (WBD) to Sector Weight from Overweight without a price target. The firm says it has no way of knowing if a deal with Paramount Skydance (PSKY) will ultimately materialize. KeyBanc is “nervous” from reports suggesting Warner Bros. CEO David Zaslav wants $40 per share and a bidding war. The firm likes Warner’s fundamental improvement story, but sees likely downside for the stock if a deal fails to materialize. The stock’s valuation has “gotten ahead of the fundamentals,” the analyst tells investors in a research note.