Hollywood still continues to grapple with the ongoing strikes from the Writer’s Guild of America (WGA) and the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA). Media and entertainment major Warner Bros. Discovery (NASDAQ:WBD) now expects these strikes to persist throughout the year. As a result, WBD has revised its expectations for adjusted EBITDA for the full year, projecting a range between $10.5 billion and $11 billion, compared to the prior outlook of $11 billion to $11.5 billion.
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This points to a negative impact ranging from $300 million to $500 million. Concurrently, WBD has boosted its free cash flow expectations to at least $5 billion. Additionally, it anticipates free cash flow for the third quarter to top $1.7 billion, driven by the incremental impact from the strikes and the performance of the box office hit Barbie.
WBD has reiterated its net leverage expectations of below 4x by the end of this year, along with a gross leverage range between 2.5x to 3x by the end of next year.
Overall, the Street has a consensus price target of $20.88 on WBD, accompanied by a Moderate Buy consensus rating. This implies a massive 75.7% potential upside in the stock.
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