Is Warner Brothers Discovery (WBD) A Great Buy?

🌟🌟🌟Warner Brothers Discovery $Warner Bros. Discovery(WBD)$  is a leading global  media and entertainment company that creates and distributes the world's most differentiated complete portfolio of branded content across television, film, streaming and gaming.  WBD is available in more than 200 countries and territories and in  50 languages.

Its iconic brands and products include Discovery Channel, Max, Discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, Motor Trend, Animal Planet, Science Channel.

WBD also owns Warner Bros. Motion Picture Group,   Warner Bros. Television Group, Warner Bros. Picture Animation, Warner Bros. Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Espanol, Hogar de HGTV and many more.

WBD was formed through the divestment of Warner Media by $AT&T Inc(T)$  and its merger with Discovery Inc on April 8 2022.  However Warner Bros. actually started in April 4 1923 by 4 brothers Harry Warner, Albert Warner, Sam Warner and Jack Warner.  In those early days, Warner Bros. produced its own films, handled filmmaking operations as well as theatrical distribution, marketing and promotion of its own films.

WBD's share price jumped 16% last Thursday December 12 when the media giant announced a plan to restructure its business lines.

Under this new corporate structure, WBD will serve as the parent company for 2 distinct operating divisions.  They are Global Linear Networks and Streaming & Studios.

The Global Linear Networks is a premier linear television business that operates some of the most renowned networks with compelling news, sports, scripted and unscripted programming.

Streaming & Studios is a globally scaled streaming platform and storied film and entertainment studios.

WBD expects the new corporate structure to enhance clarity and focus with each division positioned to deliver on its specific strategic and operational objectives. 

Global Linear Networks will focus on maximising profitability and free cash flow to continue deleveraging.  Streaming & Studios will focus on driving growth and strong returns on increasing invested capital.

WBD's President and CEO David Zaslav said that the new corporate structure will enhance flexibility with potential future strategic opportunities across an evolving media landscape in order to deliver significant shareholder value.  WBD expects to complete the implementation of the new corporate structure by mid 2025.

This is the latest positive development for WBD which is nearing its 52 week high, trading at USD 12.07 at the last closing on Friday.  WBD is now up 30% in just 1 month.

Wall Street Analysts say that the new structure will give Warner Bros Discovery the flexibility to sell or spin off its network business, which has struggled as more customers turn to streaming options.

Is WBD a Buy?

According to Wall Street Analysts, the intrinsic value of WBD is USD 21.10.  Compared to the last closing price of USD 12.07, it is undervalued by 74%!  

I bought WBD 4 months ago as I believe that it has lots of upside potential.  Compared to its competitors like $Netflix(NFLX)$  and $Walt Disney(DIS)$  it is a great buy.   Netflix's last closing price was USD 918.87 while Disney is USD 113.34.

I am continuously searching for great buys in stocks and I believe Warner Brothers Discovery is a media giant that it is worth investing in.

As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy. 

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