Warner Bros. cut to SELL by Argus as Paramount deal nears
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Warner Bros. Discovery (WBD) was downgraded to SELL by Argus, which said the company’s shares have little further upside with Paramount Skydance’s (PSKY) proposed $31-per-share acquisition expected to close imminently.
Argus analyst Joseph Bonner said a recent settlement of a multistate antitrust lawsuit “cleared the way” for the merger while the gap between WBD’s share price and Paramount’s (PSKY) offer has effectively closed.
Argus said its 2026 GAAP earnings forecast is a loss of $0.90 per share, followed by an EPS of $0.07 in 2027. The firm forecasts long-term earnings growth of 6%.
Joseph highlighted mixed operating trends. Streaming revenue rose 10% to $3.1 billion in the second quarter, while adjusted EBITDA for the segment jumped 63% to $512 million. But Networks adjusted EBITDA fell 5% to $1.45 billion, and Studios EBITDA plunged 89% to $96 million.
Argus also cited WBD’s "secular decline" in cable television and the loss of domestic NBA rights as key risks.
WBD shares have gained about 7% so far this year, compared to a 12.2% rise in the broader index.
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