Raymond James lowered its price target on Warner Bros. Discovery (WBD, Financials) to $13 from $14, while maintaining an Outperform rating, as shares of the media company continue to slide. The stock closed at $9.16 on Thursday following a nearly 13% single-day decline, contributing to an 11.67% drop over the past week.
The revised target was issued as Warner Bros. Discovery prepares to report earnings for the first quarter of 2025. In a note to clients, Raymond James analyst Ric Prentiss attributed the change to broader macroeconomic concerns, including trade tariffs and slowing industry momentum. Despite recent weakness, Prentiss maintained that the stock remains undervalued relative to peers, citing a current enterprise value-to-EBITDA ratio of 7.82.
Warner Bros. Discovery is in the process of restructuring its business units to provide clearer segment reporting and increase strategic flexibility. The company has also been actively refreshing its board of directors, with the appointment of Anton Levy, a former co-president at General Atlantic, announced this week. His addition follows the appointment of two new members in January, moves that suggest an effort to preempt shareholder activism.
Amid broader consolidation chatter in the media industry, Warner Bros. Discovery has been the subject of speculation around potential asset sales or structural changes. Analysts have drawn comparisons to recent or proposed spin-offs by peers including Comcast (CMCSA, Financials) and Lionsgate. Prentiss said vertical separation and horizontal integration trends are gaining traction across cable networks and streaming platforms.
In addition to its corporate restructuring, Warner Bros. Discovery canceled the expansion of its hit video game Hogwarts Legacy. The company said the decision reflects concerns over content volume and pricing and is part of a larger overhaul of its gaming division.
Warner Bros. Discovery has a market capitalization of $22.49 billion and reported annual revenue of $39.32 billion. The company maintains a moderate level of debt, according to public filings.
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