Deutsche Bank analyst Bryan Kraft lowered the firm’s price target on Warner Bros. Discovery to $20 from $26 and keeps a Buy rating on the shares. The company reported Q3 results that “handily beat” the firm’s estimates for EBITDA and free cash flow, while slightly missing on the top line, but stock price declined 17% due to management’s comment that if advertising weakness persists in 2024, then it’s unlikely that the company will be able to deleverage down to the top end of its target leverage range by the end of 2024. The comment “does not necessarily imply a large downward revision to consensus EBITDA,” but the firm believes a material downward revision to EBITDA is “warranted” and it has taken its 2024 EBITDA to $10.5B from $11.2B pre-Q3, driving its price target cut.
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