{"id":1236406168,"date":"2025-10-21T10:21:57","date_gmt":"2025-10-21T17:21:57","guid":{"rendered":"https:\/\/www.hollywoodreporter.com\/?p=1236406168"},"modified":"2025-10-21T13:52:10","modified_gmt":"2025-10-21T20:52:10","slug":"warner-bros-discovery-stock-high-deal-options-paramount","status":"publish","type":"post","link":"https:\/\/www.hollywoodreporter.com\/business\/business-news\/warner-bros-discovery-stock-high-deal-options-paramount-1236406168\/","title":{"rendered":"Warner Bros. Discovery\u00a0Stock Hits Three-Year High After Putting Itself For Sale, Analysts Back Paramount"},"content":{"rendered":"\n\t\t\t\t
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\tShares of Warner Bros. Discovery (WBD) popped on Tuesday, hitting a 52-week and three-year high after the entertainment conglomerate said that its board of directors has launched<\/a> “a review of strategic alternatives to maximize shareholder value.” The news came after weeks of deal chatter surrounding the Hollywood giant, led by CEO David Zaslav and just ahead of Netflix’s third-quarter earnings report<\/a>.<\/p>\n\n\n\n\n\tNetflix’s stock hit a high of $20.58 earlier in the day before closing up 11 percent at $20.33.<\/p>\n\n\n\n\n\tCiting \u201cunsolicited interest\u201d from “multiple” parties, WBD said the options include continuing with the its planned split and spin<\/a>, a \u201ctransaction for the entire company\u201d and \u201cseparate transactions for its Warner Bros. and\/or Discovery Global businesses.\u201d Plus, it mentioned the option of \u201can alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to our shareholders.\u201d<\/p>\n\n\n\n\n\tThe company indicated that there was no timeline for the strategic review. Said Zaslav: “It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market.”<\/p>\n\n\n\n\n\tTD Cowen analyst Doug Creutz, in a reaction note, shared: “We view the announcement from the company as a formality as news reports had already indicated that the company was already in discussions with multiple parties.”<\/p>\n\n\n\n\n\tHis take on what is likely to happen on the deal front: “We continue to think a transaction with Paramount Skydance is reasonably likely,” Creutz concluded. “We are more skeptical that other, more attractive bidders will emerge.”<\/p>\n\n\n\n\n\tThe analyst has a “hold” rating with a $14 stock price target on the company’s shares.<\/p>\n\n\n\n\n\tBenchmark analyst Matthew Harrigan boosted his stock price target on WBD from $18 to $25 following Tuesday’s announcement. “Even with [the] morning\u2019s around 10 percent price advance, WBD stock has a plausible sustainable higher single-digit or better free cash flow yield post 2025,” he concluded. “The higher $25 valuation simply reflects pushing realization to 2026.”<\/p>\n\n\n\n\n\tHe and his colleague Daniel Kurnos are bullish that David Ellison’s Paramount Skydance can walk away with WBD. “Although Larry Ellison may have qualms about supporting a further Paramount Skydance ‘old media’ acquisition under the mantle of his son, both Benchmark analysts following the respective companies feel this prospective combination offers the best strategic value in tandem with high likelihood for regulatory approval,” Harrigan wrote. “Apple, Amazon, and almost certainly Comcast would likely confront ‘transactional’ friction from the current Administration, while Netflix co-CEO Greg Peters has expressed disinterest.”<\/p>\n\n\n\n\n\tAnd Harrigan sees benefits in a deal pre-WBD’s separation. “A nearer-term bid is likely less expensive than a post-separation takeout reflecting more Warner Bros. studio and HBO Max momentum, as well as a possible tax-driven further 12-month timing lag post-separation,” he explained. <\/p>\n\n\n\n\n\tBank of America analyst Jessica Reif Ehrlich reiterated her “buy” rating and $24 price objective on WBD on Tuesday. “Today’s acknowledgement of multiple unsolicited parties indicating interest in the company (for both the entire company and Warner Bros.) should provide a floor for the share price,” she argued. “It has been our view that post-split, standalone Warner Bros. would not be an independent entity for an extended period. Given WBD’s wealth of premium IP and robust library, we believe Warner Bros. is an attractive potential acquisition target.”<\/p>\n\n\n\n\n\tShe also dove into potential deal scenarios a bit. “There are numerous considerations to a potential transaction, including regulatory concerns, financial risk, and tax implications (previously announced split is a tax-free transaction),” Reif Ehrlich highlighted. “Regulatory focus would depend on the structure of the transaction\/buyer, with factors including competitive concerns related to the combination of Hollywood studios and cable networks, although secular challenges in traditional media would seem to limit this risk.”<\/p>\n\n\n\n\n\tConcluded the expert: “Along these lines, the composition of a potential bid will be a consideration for WBD shareholders. It remains unclear to us if there is now tax risk to the previously announced separation as a result of unsolicited offers that have now been confirmed by the company. Notably, press reports indicate Netflix and Comcast are prospective bidders (unclear for total company or specific assets) in addition to previously reported Paramount Skydance interest.”<\/p>\n\n\n\n\n\tEarlier this month, Guggenheim analyst Michael Morris raised his WBD stock price target by $8 and stuck to his “buy” rating. “Investor discussion remains focused on the potential for a total company bid versus the planned 2026 business separation,” he wrote.<\/p>\n\n\n\n\n\tAnd he concluded: “We see further consolidation as possible and anticipate investors will continue to consider asset value as a primary basis for share price targets. As such, we update our valuation approach to a sum-of-the-parts methodology, which yields a $22 12-month target versus $14 prior.”<\/p>\n\n\n\n\n\tRobert Fishman, analyst at MoffettNathanson, on Tuesday discussed possible WBD bidders. \u201cFirst, as we\u2019ve previously acknowledged, a potential Paramount Skydance bid for the whole company makes a lot of strategic sense by owning a much stronger slate of IP at Warner Bros. and seeking scale with the combined HBO Max and Paramount+ platforms,\u201d he started off. \u201cCombining the linear network portfolios would also likely yield significant cost synergies, while unlocking strategic benefits from pairing CBS News with CNN and leveraging the long-standing CBS-Turner partnership for NCAA\u2019s March Madness Final Four, plus other overlapping sports rights portfolios.\u201d<\/p>\n\n\n\n\n\tThe expert called Comcast an \u201cobvious\u201d candidate to bid for WBD. \u201cA Comcast bid would start with the strength and potential for cost synergies in combining the two companies\u2019 studios and streaming platforms. There is additional opportunity to monetize Warner Bros. IP with Universal theme parks (think Batman, for example). And, of course, there are also potential cost synergies between Versant and WBD\u2019s cable network portfolio. On paper, the fit is nearly perfect.\u201d<\/p>\n\n\n\n\n\tFishman\u2019s telecom analyst colleague Craig Moffett added: \u201cThe problem is regulatory. Or, if you prefer, political. Leaving aside any legitimate concerns about further consolidation of, say, the studio business, the real issue here is that Comcast is badly disfavored by the current administration.\u201d<\/p>\n\n\n\n\n\tFishman also sees a possible private equity company partnership with Sony as \u201canother path\u201d that could be open to WBD, but he ascribed \u201ca much lower probability\u201d of a bid from such digital and tech giants as Netflix, Amazon, and Apple. <\/p>\n\n\n\n\n\tFishman\u2019s bottom line: \u201cUltimately, we believe Paramount Skydance remains the most likely to succeed in acquiring WBD.\u201d<\/p>\n\n\n\n\n\t

<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/div>","protected":false},"excerpt":{"rendered":"

Benchmark analyst Matthew Harrigan even boosted his stock price target by $7 to $25 following Tuesday’s news that the conglomerate’s board will review various deal and other options.<\/p>\n","protected":false},"author":1223244,"featured_media":1236260086,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"override_post_title":"","override_post_excerpt":"","authors":[],"contributors":[],"styled_by":[],"_image_credit":"","_wp_attachment_image_alt":"","pmc_selected_wwd_video_media":"","pmc_top_video_source":"","pmc_top_video_duration":"","wwd_top_video_source":"","wwd_top_video_duration":"","pmc_selected_featured_media":"","pmc_selected_video_media":"","pmc_selected_variety_video_media":"","variety_top_video_source":"","variety_top_video_duration":"","pmc_featured_media_has_alt_text":true,"_pmc_featured_animated_media_id":0,"_pmc_featured_video_override_data":"","_pmc_featured_video_override_url":"","_pmc_featured_video_response_data":"","pmc-gallery-linked-gallery":{},"pmc_list_item_description":"","primary_category":"","primary_vertical":"","_mt_pmc_exclude_from_seo":"","_pmc_opengraph_title":"","_pmc_opengraph_description":"","categories":64,"subcategories":65850,"thr-review-summary-credits":"","thr-full-credit":"","thr-review-mpaa-rating":"","thr-review-running-time":"","_synopsis":"","_air_date":"00-00-00","pmc-imdb-id":"","pmc-review-type":"","pmc-review-rating":"","pmc-review-rating-out-of":"","pmc-review-snippet":"","pmc-review-title":"","pmc-review-canonical-link":"","pmc-theatrical-release-date":0,"pmc-director":"","pmc-review-image_attachment_id":0,"thr_post_headlines":"Benchmark analyst Matthew Harrigan even boosted his stock price target by $7 to $25 following Tuesday's news that the conglomerate's board will review various deal and other options.","_variety-sub-heading":"","mt_seo_title":"Warner Bros. 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