Warner Bros Discovery Stock Rises Despite Dismal Results

Options bulls are still betting on upside, however

Deputy Editor

Feb 24, 2023 at 10:46 AM

Warner Bros Discovery Inc (NASDAQ:WBD) reported disappointing fourth-quarter results after the close yesterday, with losses of 86 cents per share alongside revenue of $11.01 billion, compared to the anticipated losses of 21 cents per share and $11.36 billion in revenue. The security attracted three price-target hikes after the event, though, including one from J.P. Morgan Securities to $17 from $15. WBD is up 1.1% to trade at $15.90 at last check.

Wolfe Research analyst Peter Supino noted the stock could soon "take a breather," as net debt remains high, and the security is sporting considerable year-to-date gains. Plus, the number of U.S. pay TV subscribers fell in the fourth quarter amid a switch to streaming.

WBD is up 62.2% so far in 2023, though the stock appears to have run into pressure at the $16 level. The shares are also running into their 260-day moving average, which the equity hasn't conquered since June 2021.

Over in the options pits, 25,000 calls and 16,000 puts have been exchanged so far today, which overall volume running at double the intraday average. The weekly 2/24 16-strike call is the most popular, but new positions are being opened at the 15.50-strike put in that same series.

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