Warner Bros Discovery Shares Go Up on Day 3 As Veteran Analyst Sees Company “Ready to Get Involved”

Shares of Warner Bros. Discovery gained more than 5% to close the trading day at $ 25.97 after gaining 11% earlier, with more bulls building on the new shares.

It is only the third trading day for the WBD which moved sideways yesterday after starting at $ 24.08 on Monday. WarnerMedia officially spun off AT&T and completed a $ 43 billion merger with Discovery on Friday. AT&T shareholders own 71% of the new company, although Discovery’s management is responsible. The volume was heavy and approached six times the average share level.

The uptrend came on the broadest trading day, the Nasdaq up 2% and the Dow down 1%. However, the earnings of other media and tech companies were more modest than those of Warner Bros. Discovery.

This morning Jessica Reif Erlich, longtime media analyst at Bank of America, released her full support for their WBD report and began covering the “buy” rating. Priced at $ 45 for a 12-month period, she wrote to clients in a note that the combined company is a “global media force” and “ready for field launch.”

According to Ehrlich, the deal is “the third major media transformation in the past two decades,” following Bob Iger’s rise as CEO of Disney in 2005 and Comcast’s acquisition of NBCUniversal in 2011.

“We believe WBD’s management is strong in many areas: strategically, operationally and financially. “And he has a strong background in purchasing power,” Ehrlich wrote.. “we believe mleadership has passed The Develop a pre-closure strategy. Now is the time to implement at many levels, including new organizations / Leadership structure, market strategy. [direct-to-consumer]and a roadmap For what რეAlizarin Potential revenue / expense synergy.

According to the analyst, stock trading will be volatile in the short term. But an added benefit, he says, is that the $ 3 billion cost savings under the deal are “highly achievable, if not conservative.” Many investors and the media are keeping an eye on this number as it will correlate with the uncertain number of layoffs expected in the coming weeks.

Meanwhile, AT&T stock continued to drift, increasing the fraction and closing at $ 19.42, down from $ 19.63 where it started the week. Prior to the merger split, which sent the telecom giant’s share price skyrocketing, it had just climbed from a multi-year low of $ 16.63 set in December last year.

While some Wall Streeters believe AT&T’s story would be more compelling without DirecTV or WarnerMedia, Kate Snyder, along with CFRA Research, confirmed her “sell” rating on the stock.

The creation of Warner Bros. Discovery “marks the end of AT&T’s disastrous invasion of the media industry,” Snyder wrote in a research note, “leaving him with significant debt accumulated over the past several years by various acquisitions.” While we are pleased that the company is returning to its core competencies, we note that it has made significant progress in 5G racing. “