WBD Stock Forecast & Price Target

Warner Bros. Discovery's streaming segment, particularly through HBO Max, is expected to generate robust financial performance, with an estimated EBITDA of $1.38 billion for the full year and quarterly profit growth projected at $404 million for the fourth quarter, aligning with management's guidance. The studio segment is also poised to excel, with full-year EBITDA anticipated to exceed $2.4 billion, highlighting the strength of the company’s theatrical releases and content licensing. Furthermore, the company's strategic plan to separate its networks from streaming and studios in 2026 positions it for future growth opportunities, while potential industry dynamics may support further valuation improvements.

Warner Bros. Discovery is projected to experience a significant decline in its Networks segment EBITDA, forecasted at an 11% drop to $5.8 billion in 2026, largely due to ongoing secular pressures impacting linear advertising revenue and the substantial loss of NBA content that historically drove viewership. The persistent trend of cord-cutting and the rise of "skinny bundles" are expected to exacerbate distribution revenue declines, potentially remaining in the high single-digit percentage range. Additionally, various downside risks, including consumer spending impacts from a potential recession and competition for viewer attention, pose substantial threats to subscriber retention and revenue generation, which could negatively influence the company’s cash flow and overall financial valuation.