Warner Bros. Discovery dip since Max reveal due to ‘churn anxieties,’ says Wells

Wells Fargo notes that Warner Bros. Discovery shares have declined 11% in the three sessions since the company’s "Max" streaming service launch event, versus the media group being down 3% and the S&P 500 being flat in the same period, which the firm attributes to "churn anxieties" as a subset of HBO Max subscribers will need to download the new app. However, the firm views the Max sentiment as "an overreaction" with its long-term thesis of deleveraging still intact. The firm, which revised its Q1 DTC net adds forecast down to 1M from 2M previously, including 1.5M domestic adds and 500,000 international losses, reiterates an Overweight rating and $20 price target on the shares ahead of the company’s upcoming Q1 report.