Warner Bros. downgraded to Equal Weight from Overweight at Wells Fargo

Wells Fargo downgraded Warner Bros. Discovery to Equal Weight from Overweight with a price target of $12, down from $16. The firm is changing its share thesis from deleveraging with multiple expansion to lower EBITDA with a static multiple. Lower earnings have been the story since the merger, and the trend limits future multiple expansion, the analyst tells investors in a research note. Wells calls content licensing a “double-edged sword” for Warner Bros. Discovery, saying it could come at the expense of Max engagement.