Shares of media behemoth Warner Bros. Discovery (NASDAQ:WBD) have risen steadily for the past two consecutive days on positive catalysts. WBD stock rose over 8% on June 7, followed by a 7% gain yesterday, June 8. The stock has advanced 21.9% in the past five days. Furthermore, when considering the year-to-date performance, the stock has gained a substantial 46.9%.
Key Factors Driving WBD Stock
Warner Bros. Discovery has undertaken strategic steps that are being cheered by the investor community. For one, the company ousted CEO Chris Licht of its multinational news channel, CNN (Cable News Network), on June 7. Licht was under fire on various accounts for controversies, low ratings, and questionable programming decisions, leading to a perception of him as detached and overbearing within the network.
And secondly, WBD is taking positive steps to deleverage its balance sheet from loads of debt accumulated during the merger of Warner Bros. with Discovery in 2022. In a regulatory filing dated June 7, WBD noted that it had paid down “$750 million of borrowings under its multicurrency revolving credit agreement and $800 million of borrowings outstanding under its term loan prior to the due date of April 2025.”
Additionally, the company also commenced a cash tender offer of $500 million to purchase all or any of its floating-rate notes, which carry high-interest rates and mature in March 2024. The total amounts to $2.05 billion in debt reduction, out of the $49.5 billion reported at the end of the first quarter.
What is the Future of WBD Stock?
Recently, Morgan Stanley analyst Benjamin Swinburne reiterated a Hold rating on the stock with a price target of $14, implying that shares are almost fully valued at current levels. Except for Swinburne and an unknown Barclays analyst, all ten Wall Street analysts who recently rated WBD are highly optimistic about its trajectory.
On TipRanks, the stock commands a Strong Buy consensus rating based on ten Buys and two Hold ratings. Also, the average Warner Bros. Discovery price forecast of $20.45 implies 45.9% upside potential from current levels.
