Aug. 23, 2025 at 12:31 PM ET6 min read

Warner Bros. Discovery Surges Following KeyBanc Overweight Rating

Tim BohenAvatar
Written by Tim Bohen Reviewed by Ben Sturgill Fact-checked by Ellis Hobbs

Warner Bros. Discovery Inc. stocks have been trading up by 3.75 percent amid increased streaming service demand.

Market Insights and Strategic Developments

  • KeyBanc has raised WBD’s price target to $18 from $13, while maintaining an Overweight rating. The firm anticipates positive outcomes in the upcoming Q2 earnings, highlighting revenue and EBITDA improvements.

Media industry expert:

Analyst sentiment – positive

Warner Bros. Discovery (WBD) stands as a significant player in the media landscape, evidenced by its solid fundamentals. The company’s ebitda margin of 41.6% and a gross margin of 43.3% underscore robust profitability, though the ebit margin of 8.9% and negative pretax profit margin (-13.3%) suggest operational challenges. With a price-to-sales ratio at 0.74 and price-to-book at 0.79—well below typical industry norms—WBD appears undervalued, offering potential upside to investors. The debt profile, particularly a reasonable total debt to equity ratio of 0.96, indicates WBD is adequately managing its leverage, supported by an interest coverage ratio of 8.4x. Additionally, substantial free cash flow of $702 million ensures liquidity despite a hefty total liabilities mark of $64.38 billion, positioning WBD with a credible financial footing despite recent net income pressures.

Recent weekly trading in WBD exhibits a vital upward momentum. The stock closed at $12.03 after breaking resistance at $11.84, coupled with increasing volume, signaling robust bullish sentiment. The weekly candlestick pattern reveals consecutive higher lows—a hallmark of an ascending trend. A strategic buy entry near $12.00, anticipating a continuation towards the next psychological resistance level at $12.50, is suggested. Increased purchasing interest mirrors market sentiment aligned with positive financial outlooks. Volume consolidations around $11.90 to $12.00 add a layer of credibility to this tactical stance, providing traders with a strategic framework amid prevailing bullish indicators.

Catalyzing WBD’s recent performance includes entering a pivotal multi-year partnership with VideoAmp, aiming to enhance its cross-platform ad campaign capabilities. Positive analyses from KeyBanc, which recently inflated its price target to $18, further buoy investor expectations anchored on unequivocal Q2 beats in earnings and streaming segment growth, juxtaposed by a decline in global linear networks. The announced bifurcation into two distinct entities enhances strategic clarity and market alignment, leading to a 2% increase in stock value. The improving prospects have benchmarked WBD positively relative to industry peers, as highlighted by its superior earnings beat. Strong support holds around the $11.50 range, while resistance reflects at the revised target near $16 to $18. The outlook is positive, with the organization well-poised to leverage its structural reform and strategic alignments.

  • A noteworthy increase in EPS, with Warner Bros. Discovery reporting 63 cents per share for Q2, significantly surpassing analysts’ predictions of a 23-cent loss, showcases robust financial recovery and growth in streaming.

  • The firm plans to split into two separate entities by mid-2026, distinguishing Warner Bros. for streaming and studio operations and Discovery Global for broadcasting. The announcement uplifted the stock by 2%.

  • A collaboration with VideoAmp aims to enhance advertising efficiency with advanced data and measurement solutions, marking a significant stride in innovation for linear and digital platforms.

Candlestick Chart

More Breaking News

Weekly Update Aug 18 – Aug 22, 2025: On Friday, August 22, 2025 Warner Bros. Discovery Inc. stock [NASDAQ: WBD] is trending up by 3.75%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Financial Overview

During the second quarter of 2025, Warner Bros. Discovery displayed a strong swing back into profitability. The company reported a remarkable earnings per share of 63 cents, a significant turnaround from the previous year’s loss of $4.07 per share. These earnings shattered analysts’ expectations, predicting a 23-cent loss, reflecting effective cost management and strategic revenue growth initiatives.

Revenue, while marginally below consensus expectations of $9.83 billion, reached $9.82 billion, driven primarily by an increase in streaming and studio operations. Adjusted EBITDA improved by 9% year-over-year, despite challenges in Global Linear Networks. Importantly, global streaming subscriber numbers grew by 3.4 million, further solidifying the firm’s strategic pivot towards digital. The decrease in ARPU, particularly in domestic markets, posed an area for potential focus and recovery.

Beyond revenue, key financial metrics present a nuanced picture. The PE ratio stands at an elevated 38.47, suggesting high investor expectations. However, the company’s financial strength is evidenced by a sustainable debt-to-equity ratio of 0.96, supporting further leveraged growth opportunities. The strategic lowering of price targets, as cited by Raymond James, suggests a balanced view between strong performance and existing challenges in network segments.

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