Warner Bros. Discovery stock rises on Wells Fargo, Wolfe Research upgrades
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Warner Bros. Discovery (NASDAQ:WBD) shares rose more than 1% in late trading on Friday after the media giant received upgrades from Wells Fargo and Wolfe Research.
Wells Fargo analyst Steven Cahall raised his rating on Warner Bros. Discovery (WBD) to overweight from equal-weight and boosted his per-share price target to $20, noting that the company's free cash flow position is strong, even amid the uncertain global economy. 
"We now have conviction in [free cash flow] to limit downside, while the stock has asymmetric upside," Cahall wrote in an investor note.
Cahall added the company's Network segment is likely to always have "some downside risk," but its roughly $10B in adjusted EBITDA should generate annual free cash flow between $4B and $5B. 
"With no real future working cap benefits, managing content tightly and [including] the [accounts receivable] facility in debt we estimate Downside deleveraging of [three times at end of fiscal 2025]," Cahall added. 
The analyst also noted that Warner Bros. Discovery (WBD) direct-to-consumer business and HBO are undervalued compared to the company's peers, noting that Comcast (CMCSA) wanted to acquire WarnerMedia, noting that the combined company would have more than $15B in estimated 2025 domestic streaming revenue.
"The new [Warner Bros. Discovery] is emerging with strong [free cash flow], a tactical approach, greater command and control, and excellent HBO content," Cahall added. 
In addition, Wolfe Research analyst Peter Supino also boosted his rating on Warner Bros. Discovery (WBD) to outperform from peer-perform and raised his per-share price target to $20. 
Earlier this month, Warner Bros. Discovery's (WBD) CFO defended the company against attacks, saying it is not cutting back on content that works and is focusing on cashflow and profit.
Analysts are overwhelmingly bullish on Warner Bros. Discovery (WBD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates WBD a BUY.
A previous version of this story indicated WBD shares were lower. Seeking Alpha regrets the error.