Wells Fargo upgrades Warner Bros. Discovery, cites growing confidence in media company's debt reduction efforts

The risk-reward is improving for shares of Warner Bros. Discovery as the media company focuses on deleveraging and maximizing free cash flows, Wells Fargo said. Analyst Steven Cahall upgraded the media stock to overweight from an equal weight rating, citing growing confidence in the company's ability to reduce its debt.

And even with the stock's solid run this year, Cahall sees more upside ahead, lifting his price target to $20 from $13 a share. That implies 41% upside from Thursday's close. "We threw everything and the kitchen sink at a Downside Case scenario for WBD, and it still delevers to 3x by '25E," he wrote. "We now have conviction in FCF to limit downside, while the stock has asymmetric upside." WBD YTD mountain Warner Bros.

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