So we all know by now that entertainment giant Warner Bros. Discovery (WBD) is courting offers from at least one direction: Paramount Skydance (PSKY). We have also heard vague stirrings of interest—though interest without a lot of support—from both Netflix (NFLX) and most recently, Comcast (CMCSA). Some, however, think that those offers may never actually materialize, and Warner CEO David Zaslav’s hope for a bidding war may be a forlorn one. This is not stopping shareholders from piling in, though, as represented by a nearly 3% gain in Warner shares in the closing minutes of Wednesday’s trading.
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Basically, noted a Bloomberg report, the word about other potential suitors for Warner “…sound(s) more hopeful than real at this point.” Not without reason, of course; the stories have been mostly just that so far, stories. There has been no support to them, no sign of a bid amount, or even suggestion of how much Netflix or Comcast might want to put up.
Of course, it is still early days as yet. Paramount Skydance only made its offer just days ago. Warner rejected it only three days back. There is more than enough time for any other suitor to see where the bidding goes and make a projection from there. Besides, there is also the matter of regulators getting involved; Paramount just spent months fighting off regulators to get the Skydance merger approved in the first place. Going back to that well with a proposition that sees them owning a second news network is not likely to sit well.
Pluto Steps In
Meanwhile, Warner is augmenting its presence in the free, ad-supported streaming television (FAST) space by making a further connection to Pluto TV. Six new Warner-based channels were recently added to the lineup, reports note, giving viewers that much more to choose from.
The new channels include four from Food Network: Delicious Eats by Food Network, Home Cooking by Food Network, Best of Bobby Flay on Food Network, and Chef vs. Chef on Food Network. Magnolia Network will step in with Chip and Jo Feels Like Home on Magnolia Network. The sixth channel is called simply Beach Day, which is described as a “…search for the perfect beachside homes around the world.”
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on six Buys and 11 Holds assigned in the past three months, as indicated by the graphic below. After a 124.75% rally in its share price over the past year, the average WBD price target of $18.30 per share implies 1% downside risk.
