WBD Stock Forecast & Price Target

Warner Bros. Discovery is projected to experience strong financial results, particularly in its streaming segment, with an expected fourth-quarter EBITDA of $404 million, contributing to a full-year estimate of $1.38 billion. The robust performance of the studios segment, anticipated to exceed $2.4 billion in full-year EBITDA, underscores the company's success in theatrical releases and content licensing. Additionally, the planned separation of streaming from networks and studios in 2026 is expected to further enhance operational efficiencies and unlock value, positioning the company for a positive outlook amidst various growth factors and market conditions.

Warner Bros. Discovery is facing a challenging financial outlook, with linear advertising revenue expected to decline due to ongoing secular pressures and the significant loss of NBA content, forecasted to result in an 11% decrease in Networks segment EBITDA to $5.8 billion by 2026. The persistent trend of cord-cutting and the rise of "skinny bundles" are likely to exacerbate distribution revenue declines, hindering subscriber retention and ultimately impacting the company's ability to finance new content creation. Additionally, macroeconomic factors, such as potential recessionary impacts on consumer spending and media partner demand, pose further risks that could adversely affect revenue growth, cash flows, and the overall valuation of the company.