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That downgrade has the firm’s analysts dropping shares of WBD stock from an “overweight” rating to an “equal weight” rating. Wells Fargo also lowered its price target for WBD stock from $16 per share to $12 per share.
To put that news in perspective, the analysts’ consensus rating and price prediction for WBD stock is moderate buy based on 16 opinions and $15.75 per share. Investors will also note that the new price target from Wells Fargo represents 13% growth from its prior close.
What’s Behind the WBD Stock Downgrade?
Wells Fargo analysts haven’t been impressed by the company since it was created after the merger of WarnerMedia and Discovery. They said the following in a note to clients obtained by Seeking Alpha.
“Lower earnings have been the story since the merger and the trend limits future multiple expansion.”
Today’s downgrade of WBD stock has the shares falling 2.6% as of this morning. That builds on an 11.3% drop since the start of the year. It also comes with some 3.4 million shares traded, as compared to a daily average of about 22.7 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Article printed from InvestorPlace Media, https://investorplace.com/2024/01/wbd-stock-dips-as-wells-fargo-downgrades-warner-bros-discovery/.
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