Wells Fargo had already seriously revised its target price for WBD stock from $42 to $19. The downgrade from “buy” to “hold” came immediately after Warner Bros. Discovery’s concerning second-quarter earnings report. In its first quarter as a combined company, Warner Bros. Discovery lost $3.4 billion. The company totally whiffed on Wall Street’s Q2 estimates for the combination of WarnerMedia and Discovery, Inc., sending the stock below $15. It has not passed that threshold in the month that followed.

Among Wells Fargo’s current-day concerns for David Zaslav’s mega-merger is the fact that Warner Bros. Discovery’s problems didn’t end then and there. “The Q2 call was supposed to be the big kitchen-sink event, with a new valuation anchor point putting a floor on the stock,” the analysts wrote. Nope, shares are down another two bucks since then despite more layoffs, continued cancellation of content, and other cost-cutting maneuvers. We’d say Warner Bros. Discovery needs a superhero, but they can’t seem to get a handle on this whole DC thing. Related Here’s Why ‘Westworld’ Probably Won’t Be the Last Big HBO Show That Moves to FAST Warner Bros. Discovery Lays Off 70 Staffers from Turner Sports, Bleacher Report Related 24 Famously Queer and Homoerotic Horror Movies, from ‘Psycho’ to ‘Hellraiser’ 23 Controversial Film and TV Book Adaptations That Rankled Their Audiences and Authors
Cahall & co. also don’t see some of Warner Bros. Discovery’s future earnings guidance to be particularly achievable — not through this particular asset mix (read: heavy on linear television, which is susceptible to cord cutting) and this debt load (read: A LOT), in this economic environment (read: pending recession and soaring interest rates). “Confidence is fragile at best,” the team said of WBD’s place in the market. But they do like Zaslav’s diverse portfolio of programming and platforms. Beyond Warner Bros.’ big-screen blockbusters is Discovery’s slow-moving combination of direct-to-consumer (DTC) products HBO Max and Discovery+. Wells Fargo is bullish on the streaming possibilities but concerned the company’s “DTC guidance could prove overly optimistic.” It’ll be a while until we find out what the HBO Max-Discovery+ product can be (and what it will cost and be named); Warner Bros. Discovery expects to launch its one combined SVOD/AVOD-hybrid service next summer. Shares of WBD closed Wednesday at $12.68 apiece, or half what they started at in early April. In the early going on Thursday, the stock is down further. While Wells Fargo is down with clients taking an inexpensive flyer on WBD shares — so long as they remain below the somewhat-random $15 mark, it seems — they warn of the volatility such a low-priced stock can experience on a weekly basis. (You know what else you can get for $15? One month of ad-free HBO Max.)

Officially, Wells Fargo’s equity analysts are sticking to their $19 price target. Everybody’s got a price. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.