Warner Bros. Discovery (WBD) shares plummeted 5.06% in Friday's pre-market trading session, continuing a downward trend that began after the company's recent earnings report. The sharp decline comes despite the media giant swinging to a $1.6 billion profit in the second quarter, suggesting investors are reassessing the company's future prospects and recent stock gains.
The stock's tumble follows a 35% surge over the past two months, which was driven by WBD's announcement of plans to split into two separate entities by mid-2026. Under this restructuring, CEO David Zaslav will lead the Warner Bros. streaming and studios division, while CFO Gunnar Wiedenfels will head the Discovery Global networks business, including CNN and TNT Sports. However, concerns about leadership and the company's hefty $36 billion debt load appear to be weighing on investor sentiment.
Analysts have mixed views on WBD's outlook, with several adjusting their price targets in the wake of the earnings report. Deutsche Bank maintained a Buy rating but lowered its target from $20 to $19, while Raymond James cut its target to $13 from $14. Wells Fargo, on the other hand, raised its target to $13 from $11. The conflicting analyst opinions reflect the uncertainty surrounding Warner Bros. Discovery's future as it navigates a rapidly changing media landscape and attempts to justify its controversial 2022 merger.
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