Warner Bros. Earnings: Shares Could Rebound with the Help of Two Major Movies

Warner Bros. Earnings: Shares Could Rebound with the Help of Two Major Movies

• Stock in Warner Bros. is trading at multi-year lows.
• But the company has two major movies on deck: Furiosa: A Mad Max saga and A Minecraft film.
• Plus, the options premiums are rich—exactly what I like to see ahead of earnings.

Warner Bros. Discovery (WBD) is no stranger to dramatic plot twists—both on the big screen and in its financial journey. The media powerhouse’s performance at the box office is fluctuating, its stock is trading at multi-year lows and investors are eagerly awaiting the next earnings report.

Here’s why the company’s on my radar—and how I’m preparing to trade it. As of this week, it doesn’t have a title in the top 10 U.S. domestic box office rankings (IMDb), but major projects are on deck. One of the most-anticipated, Furiosa: A Mad Max Saga, is scheduled for release just ahead of earnings. Plus, A Minecraft Movie reached screens worldwide just days ago, starring Jack Black as Steve and Jason Momoa as Garrett. The buzz is getting louder and could boost box office potential.

The Minecraft film matters because it’s related to one of the best-selling video games of all time and thus arrives with a massive ready-made global fan base across age groups. The movie is expected to generate strong family-driven attendance in the U.S. and turn in an impressive international performance. Timing the release just ahead of earnings gives the studio a chance to surprise the market with early success metrics.

Stock outlook: undervalued or just out of favor?

Currently trading around $7.97, WBD stock has disappointed many long-term holders. But where others see stagnation, I see opportunity. Analysts on TipRanks have set a 12-month average price target of $12.87, reflecting a 61.5% upside.

Other key analyst insights include a consensus rating of Moderate Buy (10 buys and six holds). In addition, Warner Bros. recently raised its 2025 EBITDA forecast to $1.3 billion, nearly double the prior estimate.

Looking at the company’s strategy, we see it chose not to renew NBA broadcasting rights, shifting its focus toward international streaming expansion in Australia, the U.K., Ireland, Germany and Italy

From a technical analysis perspective, the following stats apply. MACD: -0.66 (showing early signs of a shift in momentum); RSI (14): 36.63 (nearing oversold conditions): and trading below major EMAs, indicating a bearish trend.

My trading plan: zero extrinsic back ratio ahead of earnings

WBD has an implied volatility rank (IVR) of 82, making it one of the higher-IVR names in the media. That tells me options premiums are rich—exactly what I like to see ahead of earnings when planning a defined-risk strategy.

Because the stock is relatively inexpensive, I’m looking to structure a zero extrinsic back ratio going into the earnings event.

Here’s why: A cheap underlying means capital-efficient exposure, and I’m looking to be long synthetic stock but with limited risk on the downside.

This setup gives me the ability to capitalize on a directional pop, especially if Furiosa or Minecraft delivers an unexpected hit at the box office and sentiment shifts quickly.

Final thoughts

Warner Bros. is a name with legacy weight but modern-day challenges. But its a sleeper pick heading into Q2 because of its high-IVR earnings setup, the release of the Furiosa and the Minecraft movies, and strong analyst upside targets.

Whether you're an options trader looking to benefit from elevated implied volatility or just a long-term investor waiting for a turnaround story, Warner Bros. might be worth a fresh look.

Errol Coleman appears on the tastylive network shows Today’s Assignment and Trades on the Go.

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