Warner Bros. Discovery upgraded at Guggenheim on 'attractive narrative'
Presley Ann

Warner Bros. Discovery (NASDAQ:WBD) shares rose nearly 2% in premarket trading on Wednesday as investment firm Guggenheim upgraded the media and entertainment company, citing an "attractive narrative" for the first half of the year.
Analyst Mike Morris raised his rating on Warner Bros. Discovery (WBD) shares to buy from neutral with a per-share price target of $16.50, noting that there are some recent developments that have turned the firm positive on the David Zaslav-led media company.
"We see an attractive narrative for the first half of 2023, with the impact of a recently announced domestic affiliate renewals, strong cost controls, and the upcoming launch of a restructured Max product as key catalysts," Morris wrote in a note to clients.
Warner Bros. Discovery (WBD) is in the process of combining its two streaming services, HBO Max and Discovery+, with the new, unnamed service set to be unveiled this spring.
The analyst added that cost discipline in its direct-to-consumer business should also boost investor confidence that it will meet its 2023 EBITDA estimates and continue to deleverage the company. 
Morris added that Warner Bros. Discovery (WBD) is still seeing a challenging advertising environment and will continue to deal with cord-cutting, but with the stock at 5 times estimated 2024 EBITD and 6 times 2024 estimated free cash flow, the risk reward is "attractive."
Warner Bros. Discovery (WBD) shares jumped on Wednesday after Bank of America added the stock to its US 1 list.
Analysts are largely 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 HOLD.