CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our target by $1 to $9, using a narrower risk premium and a forward TEV/EBITDA of 6.24x, below the direct peer average. Adjusted EBITDA is expected to be negative in 1H and then turn positive in 2H 2024. Due to the actor and writer strikes, WBD faces lighter programming content in 2024. WBD is committed to doing a better job with blue-chip movie franchises like Game of Thrones, Harry Potter, and Superman. Free cash flow was $3.3B for Q4 2023 and $6.2B for full-year 2023. We think accelerated growth and profits for MAX video streaming may take longer. We believe the consensus is optimistic with a $13.70 target that suggests a high growth scenario. A year ago, we thought EBITDA would show significant growth in 2024, but we see the consensus estimate at $9.9B compared to $10.2B actual EBITDA in 2023. Also, the 2025 consensus estimate of $10.4B equates to less than 5% EBITDA growth. In our view, the share price reflects less patience for WBD to achieve the transformation of its linear networks to MAX.