Warner Bros. Discovery’s Massive Restructure: A Smart Move or a Desperate Gamble?
Warner Bros. Discovery (WBD) faces big money troubles, but analysts still back the media giant. Their faith stems from WBD’s expanding streaming business. The company has pushed hard with its streaming platform, Max (HBO Max), which now shows promise.
WBD forecast its global streaming subscriber count could hit at least 150 million by 2026 up from the current 116.9 million. This bold growth plan has grabbed analysts’ attention, and many think it could mark a turning point for the company.
Analysts Still Bet on WBD
Despite money setbacks, analysts from big firms remain upbeat about WBD. Benchmark analyst Matthew Harrigan has kept a strong rating on the stock highlighting the company’s streaming and studio businesses as key strengths. Likewise, Barrington Research stays optimistic seeing big room to grow in the future.
These thumbs-up hint that while WBD sails through rough seas, industry experts believe in its long-term plan
Mixed Financial Results Raise Questions
WBD’s latest earnings report, however, paints a mixed picture. The company reported a $494 million net loss in the fourth quarter—higher than last year’s $400 million loss. Revenue also dipped slightly to $10.03 billion from $10.28 billion, falling short of expectations.
Despite the losses, there were some bright spots. The company’s distribution revenue grew by 2%, thanks to an increase in streaming subscribers. However, traditional TV revenue took a hit as more people cut the cord, leading to an 11% drop in ad revenue.
A Fresh Plan to Sort Things Out
WBD is shaking things up to handle its wide-ranging business better. The company said in December 2024 it would split its work into two parts: Global Linear Networks (which has cable TV channels) and Streaming & Studios.
This change aims to boost the company’s productivity and show investors what each part of the business is worth on its own. If they pull it off, it could help WBD zero in on what matters and get its money situation in better shape.
Big Money is Watching
Even with its ups and downs, WBD has caught the eye of big-time investors. AMF Tjanstepension AB just put over $1 million into the company, and Allspring Global Investments has bought more shares. These moves hint that major players think WBD’s plan could pay off down the road.
What’s Next for Warner Bros. Discovery?
WBD is at a crucial moment. While financial losses and declining TV revenue remain a challenge, the company’s strong push into streaming and its new business structure are giving investors hope. If WBD can keep growing its streaming business while managing its restructuring effectively, it could be on a path to recovery.
