After Warner Bros. Discovery (WBD) announced a new corporate structure under which it will now operate in the two distinct divisions of Global Linear Networks and Streaming and Studios, BofA analyst Jessica Reif Ehrlich said a “key tenet of our bullish thesis” has been predicated on the unique and valuable assets underpinning the company and views this announcement as “a positive first step toward realizing this value.” As the firm notes it has written recently, Warner Bros’ linear assets “would appear to be a very logical partner” for the newly announced Comcast (CMCSA) SpinCo. In a hypothetical scenario in which the streaming and studio asset were spun out, the remaining linear assets could then be merged in an all-equity transaction with Comcast SpinCo, the analyst contends, adding that it believes the company’s standalone streaming and studio assets would be “an attractive takeover target for multiple suiters.” BofA reiterates a Buy rating and $14 target on Warner Bros., which it continues to believe has “a compelling assortment of assets.”
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Read More on WBD:
- Warner Bros. Discovery call volume above normal and directionally bullish
- Early notable gainers among liquid option names on December 12th
- Unusually active option classes on open December 12th
- Warner Bros. Discovery announces new corporate structure
- Warner Bros. Discovery price target raised to $12.50 from $11 at Guggenheim
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
