Bank of America Securities analyst Jessica Reif Ehrlich has reiterated their bullish stance on WBD stock, giving a Buy rating yesterday.
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Jessica Reif Ehrlich has given her Buy rating due to a combination of factors that indicate potential growth and value unlocking for Warner Bros. The company’s first-quarter results show signs of improvement, particularly in the Studio segment, with promising projects like a Minecraft Movie and a new Superman film set to boost performance. Additionally, Warner Bros is making strides in its direct-to-consumer business, expanding into new markets and showing profitability, despite short-term pressures on average revenue per user due to recent wholesale agreements.
Furthermore, the strategic restructuring completed in December 2024 positions Warner Bros for transformative options, such as potentially splitting the company to enhance shareholder value. This move could alleviate the burden of high debt on the studio and streaming assets, potentially increasing equity value. The analyst maintains a positive outlook with a price objective of $14, citing easing studio comparisons, potential recovery in US advertising, and further growth and profit inflection in direct-to-consumer and filmed entertainment segments as key catalysts.
In another report released yesterday, Barrington also maintained a Buy rating on the stock with a $16.00 price target.