Even Wells Fargo is concerned about the low Warner Bros. Discovery stock price: Close your eyes and buy it

Even Wells Fargo is concerned about the low Warner Bros. Discovery stock price: Close your eyes and  ...

When banks joke about your stock price, you're in trouble. According to Wells Fargo's equity analysts, customers who are considering investing in Warner Bros. Discovery stocks should just close their eyes and buy it.

Wells Fargo had already significantly reduced the price target for WBD stock from $42 to $19. The downgrade from buy to hold came immediately after Warner Bros. Discovery's earnings statement regarding its second-quarter performance. In its first quarter as a combined company, Warner Bros. Discovery lost $3.4 billion. The company totally flipped on Wall Streets' Q2 estimates for the combination of WarnerMedia and Discovery, Inc., sending the stock below $15.

The fact that Warner Bros. Discovery's problems started long before the Q2 call was supposed to be a major kitchen sink event, according to analysts. Nope, the stock has dropped another two bucks since then, despite further layoffs, ongoing content cancellation, and other cost-cutting maneuvers.

Cahall and co. do not believe that Warner Bros. Discovery's future earnings guidance would be particularly feasible, 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 rising interest rates).

And they like Zaslav's broad programming and platforms. Discovery's slow-moving combination of direct-to-consumer (DTC) products HBO Max and Discovery+ is well-known among Warner Bros. Discovery's plans to launch its one combined SVOD/AVOD hybrid service next summer.

WBD shares closed Wednesday at $12.68 apiece, half of what they started at in early April. The stock is down even more in the early going on Thursday. While Wells Fargo is down with clients taking an inexpensive flyer on WBD shares as long as they remain below the somewhat random $15 mark, it appears 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.)

Wells Fargos equity analysts are sticking to their $19 price objective. Everyone has a price.