Warner Bros. Discovery (WBD) is climbing 3.5% after KeyBanc reiterated an Overweight rating and maintained a $14 price target on the shares.
KeyBanc’s note came after WBD issued upbeat guidance on its streaming services yesterday morning. Specifically, the company, whose streaming subscriber base as of the end of last year came in above expectations, stated that it had “a clear path to reach at least 150 million global (streaming) subscribers by the end of 2026.”
A movie theater auditorium filled with an audience enjoying a blockbuster film.
KeyBanc’s Bullish View on WBD
Warner Bros. Discovery’s EBITDA, excluding certain items, jumped 10.2% last quarter versus the same period a year earlier, KeyBanc noted. Additionally, the bank is pleased that the company lost the rights to broadcast NBA games, and it expects the firm’s EBITDA margins to climb towards 20% going forward.
Also importantly, KeyBanc believes that WBD can meet its goal of growing its streaming subscriber base to 150 million by the end of 2026, and it expects the performance of the company’s legacy movie and TV assets to rebound.
Finally, noting that the shares have a forward price-to-earnings ratio of 6.6 times, below their historic average of about 8 times, the bank called the shares’ valuation attractive.
The Recent Performance of WBD Stock
In the last month, the shares have climbed 9%, while they have risen 8% so far in 2025.
While we acknowledge the potential of WBD, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WBD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
