.August 13, 2024 Tuesday 11:59:00 AM

Warner Bros. Discovery (NASDAQ:WBD) has been downgraded from Outperform to Market-Perform by Bernstein, with a price target cut from $10 to $8 due to a challenging recovery road ahead. Q2 saw a 6% revenue decline, 16% EBITDA drop, and 43% free cash flow reduction year-over-year.

Since the WarnerMedia-Discovery merger in April 2022, WBD’s stock has plummeted nearly 70%, making it one of the worst performers in its sector. Analysts cite “secular challenges” in linear TV and DTC segments, along with declining EBITDA and a 4x leverage ratio, causing investor frustration.

The potential loss of NBA broadcasting rights poses a significant risk for WBD, further complicating its already challenging situation.