While we have largely been focused on entertainment giant Warner Bros. Discovery (WBD) for the potential buyouts brewing in the background, the company is also making some efforts within its own industry, trying to get ahead as best it can. And a new deal with Philo should be a big step forward for Warner’s streaming efforts. Investors are abundantly pleased with the development, as shares shot up over 3% in closing minutes of Tuesday’s trading.
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Philo is expanding its Core plan, and with that expansion comes both HBO Max and Discovery+. Sadly, it is the ad-supported versions that will be added to Philo, but customers will be able to get a pretty nice deal. Current Philo customers can get the add-ons for $28 for the first month, and $33 per month thereafter. New subscribers, sadly, walk right in at the $33 level.
For those who want the ad-free versions, though, it may just be a matter of time. Reports note that the ad-free versions are planned for availability in “early 2026.” Warner’s executive vice president of network and streaming distribution, Rich Palermo, noted, “Between the blockbuster films and award-winning originals on HBO Max and the captivating documentaries and unscripted hits offered by Discovery+, this expanded partnership ensures Philo subscribers can enjoy even more of our world-class content.”
Potential Stock Split?
While Warner is currently the target of potential buyout from at least one source—and possibly as many as four based on some reports—there may be another move in the offing before then: a split. We have known that Warner has had an eye on breaking off its streaming and studio arms from its television arms, and that part may actually go forward before anyone makes an offer.
Since Warner would be splitting off the legacy cable operations, and quite a bit of debt, that might make the surviving company that much more attractive to potential buyers. And if the property is sufficiently attractive, David Zaslav may get that bidding war reports said he was hoping for after all. Of course, given that, at last report, Discovery+ would get 20% of Warner when it splits off, a potential buyer may not want a somewhat diluted ownership stake. But majority shares would still be in play, and that might be enough.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on four Buys and 11 Holds assigned in the past three months, as indicated by the graphic below. After a 131.19% rally in its share price over the past year, the average WBD price target of $15.50 per share implies 20.7% downside risk.
