WBD Stock Forecast & Price Target

Warner Bros. Discovery has demonstrated substantial cash flow generation, enabling a favorable trajectory for leverage improvement and supporting robust business operations. The company is experiencing growth in its direct-to-consumer segment, with a recent addition of 2.3 million subscribers primarily from international markets, and is targeting at least $1.3 billion in EBITDA by 2025. Additionally, strong performance in film studio operations has led to significant profit growth for the segment, which, when combined with upcoming European market launches, positions the company well to achieve its subscriber goal of 150 million by the end of 2026.

Warner Bros. Discovery's stock outlook is negatively impacted by a significant year-over-year decline in average revenue per user (ARPU), which is expected to remain a headwind through mid-2026 due to adjustments in distribution relationships. The company faced a 22% drop in total revenue, primarily influenced by a tough comparison with Olympic revenues and persistent weaknesses in domestic advertising trends, compounded by declining linear television profitability. Additionally, the performance of global networks is strained by subscriber losses and challenges in monetization, particularly with advertising revenue being affected by the absence of key sports events and a softer political advertising landscape.