While some might have thought that entertainment giant Warner Bros. Discovery (WBD) was holed below the waterline, sinking fast against the onslaught of numerous competitors, new reports suggest that is anything but the case. In fact, new reports suggest that not only did it hit a new 52-week high, but also, it is coasting through that high. With the end of Thursday’s trading in sight, Warner stock is up over 3%.
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Warner managed to clear the 52-week high when it hit $12.70 per share, and it continued to go up beyond that even after hitting the new high. Warner stock has been on a tear over the last year, with reports putting it up nearly 50% for the period. With earnings before interest, taxes, depreciation and amortization (EBITDA) coming in at $7.59 billion, there is clear interest in Warner stock.
But some believe that Warner shares are currently in “overbought” territory, and are suggesting in turn that investors keep a close watch on it for sudden downturns. That is not hard to see when a 52-week high goes past, even with Warner’s impressive content library and recent moves to improve its position in streaming and linear television.
A Lawsuit Move
Warner is hoping to keep this new streak alive going into a court case, as shareholders are suing Warner over its recent loss of NBA rights. Warner turned to the U.S. District Court for the Southern District of New York to dismiss said lawsuit, in which shareholders allege they were misled about just how much impact the loss of the NBA would have on Warner’s operations.
The lawsuit alleges that CEO David Zaslav and CFO Gunnar Wiedenfels made “wrongful acts and omissions” as well as “misleading” Securities and Exchange Commission (SEC) filings. One of the biggest parts of the suit was when Zaslav noted that Warner did not have to have the NBA. Warner, meanwhile, notes that there was a clear possibility that it could ultimately lose the NBA rights, and that there was “wall-to-wall media coverage of the negotiations,” making failure to disclose largely impossible.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 47.65% rally in its share price over the past year, the average WBD price target of $13 per share implies 1.09% upside potential.
