Warner Bros. And Netflix: The 'Prevailing Wisdom' Is Missing A Few Points

Warner Bros. And Netflix: The 'Prevailing Wisdom' Is Missing A Few Points Summary Warner Bros. Discovery, Inc. shows little operational improvement; recent gains stem from one-off windfalls, not sustainable performance enhancements. WBD’s box office lead is overstated due to front-loaded releases and distributor accounting; TV remains highly vulnerable to cord-cutting and declining wholesale rates. The proposed Netflix, Inc. merger offers value via reduced competition and pricing power, but faces significant antitrust, legal, and execution risks. I rate both WBD and NFLX as Hold, given elevated prices, merger uncertainty, and lack of compelling long-term upside. Analyst’s Disclosure: I/we have a beneficial long position in the shares of TMUS, AMZN, PSKY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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