Wolfe downgrades Warner Bros. Discovery to sell on peak EBITDA fears

Wolfe Research downgraded Warner Bros. Discovery to Underperform from Peer Perform with a $7 price target. The firm says that with 80% of its EBITDA from linear TV and merger synergies done, it fears the company’s EBITDA peaked in 2023. Warner and Max “need fuel to grow, or a new White House to sell,” the analyst tells investors in a research note. Wolfe further reduced its 2024E EBITDA forecast by 16% due to weaker studio results, Max’s international investments, and deterioration of linear advertising. It believes Warner Bros. Discovery’s 2025 and 2025 outlook seem more risky than 2023 and 2024.