Netflix vs. Warner Bros. Discovery: Wall Street Sees Downside in 1 of These Media Stocks but Says Buy the Other

• Warner Bros. Discovery has seen its banal melt up successful caller months amid acquisition rumors and an eventual acquisition agreement.

• Since announcing its astir $83 cardinal acquisition of Warner Bros., Netflix's banal has collapsed.

• In betwixt each of this, Paramount Skydance has been lurking and inactive hoping to acquisition Warner Bros. Discovery successful its entirety.

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One of the biggest stories successful the banal marketplace successful caller months is Netflix's (NASDAQ: NFLX) planned acquisition of Warner Bros. Discovery (NASDAQ: WBD) and the ensuing drama. Netflix projected to get Warner Bros. Discovery's movie and tv studios for an endeavor worth of astir $83 billion, including astir $11 cardinal of debt.

However, Paramount Skydance has jumped into the fray and tried to bargain Warner Bros. successful its entirety, which includes the cablegram assets that Netflix has nary involvement in. Warner Bros. continues to take Netflix arsenic the buyer, but Paramount isn't backing down. In caller months, Warner Bros. banal has surged, portion Netflix's has collapsed. Wall Street analysts spot downside successful 1 of these stocks but urge buying the other.

Warner Bros. has been successful diminution arsenic much customers person pulled the plug successful caller years and switched to streaming. The institution has tried to bargain different companies to adjacent the spread but racked up important indebtedness successful the process.

Speculation astir a takeover past September fueled a immense determination successful the stock, which has much than doubled successful conscionable a fewer months. However, it seemed similar Paramount was the starring campaigner to bargain the full company. But past Netflix swooped successful and announced an statement to bargain Warner Bros. Discovery's movie and tv studios, including HBO, for a full worth of $27.75 per share, portion the cablegram assets would beryllium spun retired into a caller company.

Paramount was unhappy and launched an all-cash tender connection to acquisition the full institution for $30 per share. The Ellison household backed the deal; Larry Ellison is the CEO of Oracle and 1 of the richest radical successful the world. Warner Bros. erstwhile again rebuffed the deal, and Paramount past sued the institution and announced plans to wage a proxy conflict against the Warner Bros. committee of directors.

Given that Warner Bros. banal trades astatine $28.40 arsenic of this writing, immoderate analysts are expressing caution. Of the 15 Wall Street analysts who person issued probe reports connected Warner Bros. successful the past 3 months, 5 urge buying the stock, and 10 accidental to clasp it, according to TipRanks. However, the mean terms people implies astir 10% downside.