WBD Stock Forecast & Price Target

Warner Bros. Discovery demonstrates a positive financial outlook due to its significant cash flow generation, which has improved its leverage trajectory and positions the company for continued growth. The streaming segment, bolstered by three major European market launches and an impressive addition of 2.3 million subscribers, is targeting at least $1.3 billion in EBITDA by 2025, aiming for a total of 150 million subscribers by the end of 2026. Additionally, the studio operations have shown substantial profit growth, particularly following successful film releases, which further enhances revenue and profitability trends across the company's segments.

Warner Bros. Discovery exhibits a negative financial outlook due to significant year-over-year declines in average revenue per user (ARPU) attributed to adjustments in distribution relationships, which are expected to persist through mid-2026. Total revenue decreased by 22%, heavily impacted by the absence of the Olympics compared to the previous year and ongoing domestic advertising challenges, particularly with soft trends in subscriber retention and the loss of crucial programming inventory like the NBA. Additional risks include potential recessionary effects on consumer spending, intensified competition for subscriber engagement, and ongoing pressures from cord-cutting, which could significantly hinder revenue growth and impact overall cash flow sustainability.