Friday, December 26, 2025

Morgan Stanley Eyes Warner Bros. (WBD) Upside as 2026 Media Outlook Favors Premium Content and AI Protection

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is one of the best high volume stocks to buy right now. On December 18, Morgan Stanley raised the firm’s price target on Warner Bros. Discovery to $29 from $15 with an Equal Weight rating on the shares. Morgan Stanley enters 2026 with a positive view on Media and Entertainment due to solid fundamental momentum. The firm’s top picks focus on three key criteria: protection against AI-driven disruption, exposure to the growing demand for premium & live experiences, and a market-beating earnings outlook.

In Q3 2025, Warner Bros. highlighted a historic performance in its film division. The company became the only studio to surpass $4 billion in box office revenue for the year, which led the industry domestically, internationally, and globally. This success put the Studio segment on track to exceed $2.4 billion in EBITDA for 2025, as management works toward a long-term goal of $3 billion by using tentpole intellectual properties like DC’s Superman and Harry Potter.

Morgan Stanley Eyes Warner Bros. (WBD) Upside as 2026 Media Outlook Favors Premium Content and AI Protection
Morgan Stanley Eyes Warner Bros. (WBD) Upside as 2026 Media Outlook Favors Premium Content and AI Protection

Warner Bros. expects its streaming division to contribute over $1.3 billion in EBITDA this year, which is a contrast to the $2.5 billion loss recorded 3 years ago. The platform added over 30 million subscribers during that period and is targeting a total of 150 million subscribers by the end of next year. While US revenue per user faces short-term pressure from ad-supported tier rollouts and contract resets, the company plans to drive growth through price increases and password-sharing enforcement. The company recorded $9.05 billion in the said revenue, but faced a loss per share of $0.06.

Warner Bros. Discovery Inc. (NASDAQ:WBD) operates as a media and entertainment company worldwide. It operates through three segments: Studios, Network, and DTC.

While we acknowledge the potential of WBD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

Source link

Hot this week

Topics

Related Articles

Popular Categories